This has certainly been an impressive rally off of yesterday’s lows, now equally about5%…..
The chart below shows a nifty little trend channel clearly showing a series of higher highs and higher lows which could maybe get back up to 1240-1250 barring any disastrous news out of Europe…..problem is that the news flow has been working in 2-3 day cycles…..this sort if volatility is likely to break this market out one way or the other….and my guess is lower.
I identified this channel yesterday as something that was forming in a fairly orderly way, but I have been doing my best to try to fade it…..to no avail….but i am using tight stops and refuse to get carried away on the short side on days like today where the opening tick is the low and we close on the dead ass highs. 1250 is also a huge resistance level and would be equivalent to unchanged on the year for the index….I am hard pressed to see that soon……
As I have been saying, I don’t want to be stubborn regardless of my macro view, the volatility is presenting opportunities on both sides of the market, but this is not the sort of time to dig in to either world view; long or short. There will be no quick fix, and the president won’t have special sauce in prime-time to fix the economy or the markets….the only thing that will is time and less leverage on govt, bank and personal balance sheets.