Time for a quick market update: Last time I posted on this was May 12th (see here), when I thought that the rally from the March low was probably just a classic relief rally and that that rally had probably run it’s course. As the chart above shows, that turned out to be correct.
Now we are back near, at, or below the March low, depending on what stock and what index you are looking at. What that means is…
…that a rally attempt may develop soon. Indeed, that is what seemed to happen on Monday this week, but it appears that attempt failed yesterday. That’s not surprising for many reasons, which, unfortunately, I don’t have time to get into this morning (got to get some work done). The key point is that sentiment has not yet gone negative enough. People have not yet panicked. That is what I am listening, watching, smelling for.
PS: The chart abouve is a 3-year weekly of the Spyders (S&P 500 ETF: SPY). Number 1 shows the break of an up trendline, 2 is a failure to make and hold a new high, 3 is a breaking of the low at point 2, 4 is a retest of the now well-established support/resistance area I highlighted, this time from below, and 5 is where we are now.