Friday, June 7, 2013

Is the Chop Over or Just Beginning?

In my last post, I said the following....

"After having such a slow, smooth, steady (and I would say almost weird) climb from the beginning of this month, it makes sense that volatility picks up a bit and we move up and down without going much of anywhere for a few days.  It's very possible that this rally continues at some point soon and the recent highs are built upon, but for now, I suspect there will be a lot of false moves and headfakes over the next three to four days."

That was pretty spot on, but even I get lucky sometimes.  Based on how the market looks here, however, it's possible that three or four days of chop could change to three or four weeks since the summer is officially here with the start of June.  Yesterday's bounce was nice but the market was quite oversold (T2106 under -300) so it was not unexpected.  

The trend this year has seemed to be nice, smooth periods followed by messy ones.  We are in a messy one right now.  The bears have yet to take control and really push this market into correction mode, but we have to wait to see if the bulls are strong enough to get follow-through on yesterday's bounce.  I hope they do as this is my time off work where I actually can watch the market all day and would like to make some money.   However, since summer is notoriously slow and choppy, I am not that optimistic.


These are the names I am watching today and into next week.  I'm fine with giving the bulls the benefit of doubt but I will go into all trades with lower expectations until the bulls show that they are totally back in control.  My guess is that it is still going to be tricky for the foreseeable future.  Good luck.

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

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