Last night was the bear's opportunity to turn the markets to the downside and reject the key resistance level. This did not happen but we have instead, a test bar. This is a dip down below the prior day's close and range, to draw out sellers. The low volume print suggests that there is no any interest from bears to push levels down. The low volume close at near mids also suggested that the bulls are not that interested to participate at current levels. So my guess is that the market is still not decided on where to go. A break of 2700 or 2800 on either side may well decide. My short was stopped out at entry as there was effort to push lower in the fractals but not a good result - this is often a sign that the market lacks the conviction to push lower or there may be some absorption.
On the macro front, the market would be shifting focus. Corporate earnings would be next and I suspect that many corp would not be giving forward guidance. Market would also train their sights on the timeline on re-opening of the economy and the post crisis landscape. Everything is fraught with great uncertainty and in such a scenario, there is really little rationale to be pushing the markets higher save for blind optimism that the Fed is going to be behind them.... Already, Fed is attracting criticism for doing too much for wall street and too little for main street. Would the Fed venture into buying equities and deciding who should be saved and who should not? there is little reason to expect that they may not since they are already exceeding the boundaries and dipping into high yield junk bonds. And as I commented before - we are moving from a capitalist market to a socialist market and with that, a greater divide between the big corp guns vs the small medium enterprises. All in all, the index may not reflect the actual situation if this divide continues. For the retail investor, this means that one need to sharpen his pencils and pick the strong quality companies and sell the weak... the divide will see smaller boys going under while the rich gets richer.
For those who have been curious... This quarter has been my best ever and the result is on par with what I make on average over a full year. It has been mainly short swing positions where I added on when we have key break of support levels. I did some very profitable intraday longs as well.
This is my last commentary from here. I would be taking on a short term consultation project and as such, want to avoid giving any market commentary which may put me in a conflict of interest position. Good luck and trade safely.
.... run chicken
