As I mentioned in my previous post, we would expect to see some range bound moves. It has been the case for the past 2 weeks partially because some bullish news from China provided some balance to the bad ones from the EU. Let’s take a look at the daily chart of the SP 500.
The SP 500 tested the Feb low twice in the past 2 weeks. The first test on 5/25/10 was effective because of the long leg of the bar. The second test was not as visible as the first one. One might say that the big green bar on 6/10/2010 was a good indicator.
For day traders and short term swing traders, we might see a better picture by looking at the 60 min chart. As we can see, a range bound market is relatively easy to trade since we could easily go in either direction. In other words, there might be more set-ups than in a trending market, which I personally think is harder to trade. Your mileage might be different though.
Look at the daily and weekly, we can easily tell that the uptrend has been broken. The monthly seems OK so far. Will we slide more? Perhaps. Dow might slide to 8500-9000 and SP500 to 1000. But it is not likely to have a double dip to the March low in 2009 again unless heavy weights like France or Germany start to have issues.
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