Welcome to summertime trading. In today’s market update, I talk about summertime trading characteristics, and give my unique perspective on what to expect going into vacation season.
From the charts
Most of the major markets are currently in consolidation. This is where price trades sideways for a certain period of time, and the price action is characterized by choppy, range-bound prices. Volume is usually lower, and the volatility flat.
The S&P, Dow, and Russell markets all show neutral trend dots, and the Nasdaq, while still in an uptrend, is nevertheless in congestion. The Bond markets are showing signs of accumulation as funds are rotating more out of stocks. This can be seen by a rising US dollar index as well.
Gold is the only market that shows building energy (Fatboy chart), but even the charts show a hesitation of precious metals as it attempts to break into new highs. Last but not least is Oil, which has gone flat in a tight range between $42 and $37. While the daily trend for $CL is bullish, the weekly trend is congested bearish, and the monthly trend is bearish.
The Hawkeye Perspective
Summertime trading is characterized by chaotic prices, and choppy, range-bound trading. Many traders have left their desks and gone on vacation, leaving the markets to the autobots. So trade with more caution than usual, pulling in your profit points and stops to account for the choppiness. Look for other strategies to trade these markets, and trend/momentum based strategies typically get hammered in choppy markets. Stay abreast of the market by getting a copy of your own Hawkeye indicators of tools. Learn what volume and price are telling you by learning to trade the Hawkeye way.