Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Unfortunately this market is right back into that “white noise” area where there is not much to discern, other than a fish flopping around on dry land. Once the S&P 500 got back over 1393-1394 we had some levels to work against, i.e. 1393-1394/1404/1422. Down in “the box” we don’t have much at all in this 35 point space… 1357/8ish is the bottom 1393ish is the top. The movement in between is random and choppy. Even here around 1370 we are in no man’s land WITHIN the white noise area… there are 20 points to the upside and 15 to the downside. No edge.
High beta/growth names tend to lose much more than the market in these downturns and if you employ any risk control you miss the inevitable bounce – that usually comes on an overnight gap of course. So it’s not an enjoyable spot. Much better to see a washout selling event and clear the brush in my opinion, but we are not getting that. It’s a lot of churn and 2-4 days up, 2-4 days down.
Looking back, the S&P 500 is right where it was on March 9th so there has been a lot of action but no progress. The broader Russell 2000 is back to where it was on January 25th. Once we go through those first 3 weeks of January when everything was a joy – the market narrowed to the large and mid caps. But since early March, even that portion of the market has been an extreme chopfest.
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