Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Doesn’t sound like the type of car you’d like to own is it? Well this might just apply aptly to them market currently as well. We are stuck in a “box” of 1370ish to 1390ish…. but within that box the volatility is tremendous, and chopping people to bits. Each time you get the near the top of the box the bulls position for a ‘breakout’ whereas each time you get near the bottom of the box the bears position for a ‘breakdown’. The only consistent is Lucy, who is snatching away the ball from both teams.
On the plus side we are consolidating sideways rather than going down any further – so this could be a consolidation mostly through time rather than price. On the negative side, those big red volume bars at the bottom – also found on the QQQs are concerning. This smacks of distribution – i.e. institutional money getting out.
What is amazing is a measly 15-20 S&P points (easily obtained on an overnight gap up or down) can change the complexion and viewpoints of trillions of dollars worth of carbon and silicon based life forms who trade off such things. Yet we’re stuck in the box. Until we aren’t.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
