We had yet another day of huge intraday swings, and even though the rebound in the afternoon that steadily took the market off its morning lows and back into mixed territory indicated that there was a good deal of underlying support following yesterday’s big rally, a massive wave of selling in the final hour underlined just how fragile and short-term this market remains.
One monster rally, while encouraging, is nothing that we can really hang our hat on, and the only thing this market has really taught us is that you either embrace a short-term mentality or stand aside, and that chasing strength is very, very dangerous. There’s just no way to utilize your capital effectively in a market that has such wide intraday trading ranges. Catching these swings can be lucrative if you are lucky, but they can also leave you frustrated at seeing stops triggered if your timing is just slightly off.
Still, while the market gave back the majority of yesterday’s gains, it did come on lighter volume, and the technical picture remains much improved. The volatility and lack of any leadership whatsoever means that finding longer-term buys is virtually impossible right now, but at least the pattern is such that there seem to be market participants out there who are willing to start accumulating positions.
I am one such person.
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