For the third straight day US markets vaulted higher like Brexit never happened. The 5-day volatility is quite something to be a part of. Man have tripped over themselves during this 5-day fiasco and those who remained patient by executing without emotion have come through on top. Now, the 3-day rally is quite something and with volume not overwhelming it is hard to really to think we have something brewing right now. Yes, volume was higher today but we can thank end-of-month rebalancing for the spike at the end of the session. Sell volume certainly dominated the rebound volume, but only price pays. Next up happens to be the June jobs report next week along with Fed minutes. Let’s not forget earnings season kicks off in less than two weeks. If we can see a few days of consolidation it would go a long way. For now, we are in a holding pattern after a huge 3-day rally.
Surprisingly enough AAII Bulls made a leap higher this week ending at 29% while Bears ended the week at 33%. Of course neutral respondents continue to be where the herd gathers. We cannot blame them given we are in a massive range bound market. A welcome sight would be a brand new trend in any direction. Unfortunately, neither side can gain enough momentum. We will stick with what the market is giving us and avoid being the hero.
This market has the opportunity to have a tremendous July. It is summer time and this market can be easily manipulated when volume is on the lighter side. Couple that with an earnings season where expectations are extremely low. Anything can happen and you should keep an open mind. Do not be surprised if we see the S&P 500 and Dow in new high territory by the end of July. Of course, we could break into multi-year lows too. Be prepared for whatever the market has in store.
Stick to the plan and stay with Big Wave Trading. If this market is going to push higher we will be on top of it!
