Channeling

Diving right from the git-go, the morning turned out to be a wait-and-see when low would be low enough. By noontime the low was hit and the slow climb up started and continued for the rest of the day. At one point all the indexes were green, but they couldn’t hold it. The Nasdaq was able to close in the green and the Russell was nearby but closed slightly red. I was disappointed that the markets weren’t more volatile for an options expiration….volume was down from yesterday also. Can’t really decide if Friday was bearish or bullish.

The S&P is still bouncing within this 3-month long channel.

If it’s going to obey the channel, it needs to bounce….a dead-cat or bull resumption bounce.

We’re in the summer doldrums and still have another 2 weeks to go. We’ve also had a lot of bad economic news but the market has been able to maintain itself within the channel. It still has not challenged the May, June or July lows….although it is trading below the 20- 50- and 200-day moving averages.

The semiconductors SOX had a good week, but we still need those banks BKX to show some enthusiasm. And oil sure could use a fire under its barrel.

Charts are very schizophrenic! Arguments can be made for a long and/or short position. Cash may be the position of choice, at least until the charts points one way….or the other.