Sunday Evening 20 June 2010
The last article was on Tuesday evening, 15 June, and we concluded by
saying there was no clear direction. [See S & P – Review The Known Facts,
click on http://bit.ly/cYAeU6, last paragraph.]
When one cannot get a strong handle on a market, the best decision can
be to make no decision and wait for clarity, something to confirm that a move
will continue, or reverse, and THEN look to take a position in harmony with the
prevailing direction.
If we had any expectation, based on the small range, weaker volume weekly
close from Friday, we would look for a correction, second bar from the end.
The last bar on the chart is Sunday evening activity, with price up 15 points.
If we had any expectation, based on the daily chart where price on Friday’s
small range closed poorly, [second bar from the end], plus there had been
a lack of upside movement and a clustering of closes, we expected a correction.
The last bar, again, is Sunday evening activity, and it demonstrates why it
is so important to let the market confirm its intent. 1130 remains as the
half-way retracement and can be potential resistance, so one need not be
rushing in believing the move is being missed. That is a “fear” motivation;
not one based on a look at the known facts drawn from developing market
activity.
1141 to 1170 can be upside targets. What we look for now is a weak
pullback that may afford a low risk entry on the buy side, if the current rally
acts well. The risk of “chasing”any market is for amateurs.
We will wait for an entry that makes sense.
