- Looking through the Black Box scans last night, looks like we're set up for a bounce in the market. The negative divergences that accompanied the last move up have been worked off this week, so it looks like we're due for some sort of bounce. Wouldn't be surprising, with today the last trading day of a weak week in the market. Profit takers might want to book their gains so that they can buy some chocolate bunnies for the weekend. Or pay their taxes! In addition, the volume today will probably be pretty light, and we all know the saying "don't short a dull tape." Next week is options week, and they tend to be good if the week preceding was weak.
- I still am mostly long with low-beta stuff, and still have some cash on the sidelines from last thursday's sells. When will I put that back to work? Not sure. I'm not too bored, because money market interest is quite a bit higher these days. It's not like sitting in the penalty box anymore! The gains from the first few months of this year have been pretty nice.
- But it does seem as if this latest pullback is more of a consolidation than anything ominous. If I had to make a guess, and I often do, I'd say that the market is most likely going to retest the previous highs and we'll see what the Black Box has to say when we're up there again. However, the thoughts running through my mind are about seasonal weakness and the election year cycle. Nobody seems to be paying much attention to those two. There are other bricks in the wall of worry in Iran and oil prices. Maybe they'll catch the blame for any correction this year.
- I imagine I'm just going to let my low-beta holdings ride for the time being. But I'll continue running nightly scans and won't hesitate becoming more or less aggressive if the Black Box gives a thumbs up or thumbs down in the days ahead.
- As always, just putting down my thoughts so that I can learn from them down the road.
