I don't rule out that the market is rolling over but I believe it is more likely that we are in the midst of a shakeout. There are a number of reasons I believe that the rally might have more to go once this shakeout is over:
- The market is still oversold in the intermediate term, even though it is short term overbought.
- The rally has only been tentatively embraced.
- Quarter end and the turn of the month have positive seasonality effects and are only a short week away.
The more likely end points for this rally are after July 4 weekend, when the positive seasonality ends or July expiration, when the market is once again overbought in the intermediate term. Bears who want to short the market should allow for both these possibilities.
2 comments:
Good stuff, thanks.
I have been trying to be patient but we reached the level I've been waiting for for weeks, had to pull the trigger. I allow for the possibility of further strength through price, by leaving my stop above the intermediate high of 1175. Target is new lows below 1040. I have also shorted FXA as more of a short term trade.
I would not be surprised if we've seen the high for this rally (8.9% low to high in two weeks is significant). But I have allowed my self a little room to add if we take a stab at 1150 towards the end of the month.
I know you expect better levels to sell from but I haven't had more than a day trade on since covering my last short at the end of May. This is record patience for me :)
JD
Post a Comment