I apologize to everyone who came looking for my posts, but left empty-handed. I had some issues in the first half of the week that prevented me from posting my thoughts on the market and hopefully all of that is behind me.
Even thought this is a holiday week, the market held Friday’s large gains. Being a contrarian, I’m suspicious of this strong rally and resisting the temptation to jump on board. As self-selected investors, we tend to have a bullish bias and it only takes a few good days to get us excited to jump back in the markets. There is no reason we can’t rally from here, it is just the market usually isn’t that easy. The best rallies come after the most demoralizing periods. If we want a strong rally, we need to base some more.
Pure speculation here, but the potential pullback in front of us could take us under the June 4th low before reversing higher. From that point we could see a slow progression of higher highs and higher lows as we inch through the trading range. But to be most effective we need one more flush-out at the bottom of the range to refresh the market.
But like always, these are just my thoughts and the market will do whatever it wants regardless of what any of us think.
Jani Ziedins (pronounced Ya-nee) is a full-time investor and writer who has successfully traded stocks and options for more than a decade. He earned a B.S. in Mechanical Engineering from the Colorado School of Mines and an MBA and M.S. Marketing from the University of Colorado Denver. His prior professional experience includes manufacturing engineering at Fortune 500 companies, structural engineering, small business consultant, collegiate instructor, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two young children.