Friday, May 6, 2016

2040-2060 Range

Look for some chop over the next few days between SPX 2040 to 2060.  We are having a battle between the optimistic dip buyers and the scared fund managers buying up puts left and right.  I can't say which way it will resolve, because although we are in the process of rolling over, we had such a strong rally from February to April that the first pullback is going to be very enticing for those left behind to increase equity exposure.  Also, let's not forget that stock buybacks are back with earnings season over.

Hard to predict this one, the fundamentals favor the bears, but the technicals favor the bulls.  Not a great market to participate in, although I would lean towards shorting rallies rather than buying dips.  Definitely no chasing now that we are near SPX 2040 support.

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