One thing we can be sure of is the short life span of our collective memory. Does anyone remember May of 2011? It took over 60 days for the top to be formed and a drop of 19% ensued. However 2012 is little different in the sense that it is an election year and all the central banks in the world have joined the Fed.
It is still little early to say whether yesterday’s intraday high was in fact the test of the high of April 2. While the upside momentum is definitely weak, the downside pressure is not strong either. In a sense a battle is going on between the bulls and bears. SPX 1450 is still possible but everyday it is becoming more difficult. The markets are struggling. I would be watching with interest what the next few days bring. If indeed we have seen the test of the high, we will see more selling from as soon as from tomorrow.
An up-side would most likely be an opportunity to sell in to the strength, if you have not done so already. For the more adventurous out there, may be to add some more defensive bets. For the cautious sorts, stay in cash and wait for the trend to develop and confirm.
Liquidity is still plentiful in the market. But Apple is not looking too good either. The heavyweights in DOW are rounding off the slope. Most of them have not been able to take out their earlier highs of March and yet somehow DOW has reached a high of the year yesterday. Interesting indeed. PM has not been able to break through the range. Most likely we will see both the dollar and gold go up together on the worry of Europe.
Unlike the other days, I do not have much of an idea about tomorrow. We will wait and watch without taking too much risk. Thank you for reading http://bbfinance.blogspot.ca/