As we finish up june, I am left wondering if the markets have indeed seen a turn. Much of my trading buds sit on the bearish side of the ledger so they are calling this an opportunity to short. From that standpoint, they might have reason to be correct because the bounce from the severe oversold signals of June and early July have met hit their estimated first targets around the 1111 level. During bull markets, we move towards the second level or the 9 year MA at 1135. Stability above supports the bull.
I have demonstrated on this site how measure movement and the direction of the S&P 500. Each of these point higher. The momentum model has staged a solid reversal this month to join the renko chart and moving average models that were posted earlier in June. Thus I should have no cause for concern and since the NDX has climbed solidly over the 1800 level, I should be overly bullish, but in reading through all the reports from the press and the blogoshere, I can't help but wonder if I am not seeing through the fog! And there lies the problem - I do not or should not read any of these news items. To be bearish is in vogue which means the world writes with a bearish slant!
And perhaps that is where the opportunity will continue to sit. Be a contrarian if the indicators argue we are moving upward. When sentiment becomes extremely negative, buying is probably the best way to play things. So what to do about the cautious view such as today's trade? Follow the indicators and they argue we are moving higher.
As for the short term, I do not have any "skin in the game" at the moment but I am playing for a solid finish to the month of July. The 1120/1130 area in the S&P will be an area of solid resistance so getting through that area before month end could lead to an explosive finish. Otherwise, I see the range holding though month end.
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