The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Tepid.
Dip-buyers were at work in the premarket when S&P futures were about +10. The index opened about +15 and dropped immediately, trading flat for 90 minutes and then sinking further for the rest of the day. Yields climbed a bit and headlines were tame.
If yesterday was reflexive dip, today was a no-show by the dip-buyers. The investing landscape is unaltered over the last two sessions and yet the bulls don’t have the appetite or the muscle to push prices up. I do not believe that they have disappeared. It is a matter of when, not if, they show up.
So when will they act? Are they playing a technical game? How patient are they willing to be? We’re 1% off the highs, which wasn’t enough to get them motivated. 6500 is an interesting technical level, 3% off the high. That seems an attractive entry point. In between here and there is technical no-man’s-land.
Sure we could bounce off of any 50 point level or any quarter percent decline but there’s no compelling level that sticks out on the chart. Considering that the market has been playing a chart-game of some kind for the last few months, if we can’t find an obvious implication from the chart, we’re left shrugging our shoulders.
Without a fresh news catalyst, we’re left balancing the long-term bullish trend with the short-term overbought conditions. The overbought conditions essentially worked themselves off today.
So is that enough to excite the bulls or do we need the pendulum to swing into oversold territory?
I’m not sure. I thought the bulls were itching to pounce on any, and all, dips. That’s not the case.
See you tomorrow.
-Mike
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