Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
This month is more and more like April every day – a very random binary action type of market. Nothing is sustaining in one direction or another. After the gap down Monday the market held in yesterday and today has filled in the gap created at the beginning of the week. This is best seen in the chart below, the SPY ETF.
Meanwhile yesterday the “leadership stocks” bounced, but today the focus is on laggards. Many of the stocks that bounced yesterday can not sustain a breakout which is the main issue in this market for any trend following methods. It remains an extremely difficult market from day to day, with little rhyme or reason.
Bigger picture the market is now back to where it was 6 weeks ago – all that has happened in the interim is a lot of heartburn. We have a RISING 200 day moving average below, and a DROPPING 50 day moving average above – so it will be interesting to see how this resolves in the coming weeks.
(the chart above shows that gap I spoke of between June 5th/June 6th – it will eventually get filled)
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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
