Bulls and Bears Drawing Lines in the Sand

So far the month of June  has been extremely tricky for traders. Overall it is down and in 13 trading sessions, 7 of them are negative. But at the same time, this market marched right up to within 1% of new all-time highs just a week ago. 

But as we have seen plenty of times over the last 18 months, 2100 on the S&P 500 is where the bulls keep running out of steam and selling off thereafter. 

This all started in late December of 2014, when price almost got up to 2100 before a sell-off came about, then throughout 2015, the market would constantly test 2100 to 2138 range and every single time it would sell-off hard and fast. 

Now here we are again – we’ve seen five straight days of selling, six out of seven in total, and just a breath away from seven straight had yesterday not bounced as hard as it did. 

I actually think, based on the breadth in stocks today to the upside, the strength in oil among other things, that the market would have had a solid follow through today, but you had the goofus over at Citi decide to downgrade Google (GOOGL) and then the Chinese ban sales of the Apple (AAPL) iPhone 6, which sent the Nasdaq tumbling. Nonetheless the market is struggling as a whole, despite the sum of its parts doing much better. 

But like I said yesterday, when you hit these intervals in the market where it seems to bouncing and dropping all over the place, you have to be positioning yourself to profit and that means not trying to hit stocks out of the park with monster gains. If you do that, you’ll find yourself holding on to loser stocks far longer then what you should be. 

The key is to stay nimble, not get extremely aggressive either long or short because this market could turn on you in either direction should it choose to do so.

Right now the bulls need to recapture the 50-day moving average and the highs from yesterday, while the bears need to take out yesterday’s lows. The lines are drawn, just be ready for anything.