As of the close
Friday, I am mildly short in equities (no longs and no commitments in
commodities). For this last week, I
added about 8% to my main trading account.
I would add that I am not risking too much here. Certainly not as much as when the market pull
back began and turned into a major decline out of the market shock event, which
I discussed here in some posts in April.
My summation
currently would be that the markets can go either direction this next week, and
that important trading traits are nimbleness and patience. The weekly charts clearly suggest that more
downside is in the market's mid-term future.
Even with Friday's oversold bounce, I would note the many bearish
engulfing candlesticks on the weekly charts.
Here are examples.
($SPX)
In the short term,
factors like the end of the 2nd quarter will more than likely trump any bearish
factors. For example, money managers
(both domestically and in Europe) will be eager to ensure investors about this
quarter after the market correction from April to June. Two areas that I will watch this week for
leadership are banking and real estate.
(Banks)
(Real Estate)
I am personally
leaning towards a mild and measured move up this week. However, I would comment that if the markets
see redemption selling this week and an increase in volatility then this summer
will most likely be a complete bear fest.
