The June chopfest continues. Getting right to it, the SPX found support right at the critical 1,600 area. This is both a lower trendline and 50-day moving average. Tough to get very bearish until this area is broken. I mentioned this area as a logical area for a pullback when the SPX was above 1,640. Played out nicely. Now what?
My feeling is we continue to have a choppy June. I’ve seen a lot of talk about how June will be this big sell-off – known as the “June Swoon”. I don’t think so. My thinking is volatility is definitely coming back and when we look up we’ll have gone virtually no where, yet had a lot of movement. I discussed some of my thoughts on June with MarketWatch radio earlier this week. You can take a listen here.
The other big area is the 1,000 region on the Russell 2000 (RUT). This is a huge area and one that won’t go down without a fight. Until either this is taken out to the upside, or the 1,600 level on the SPX is broken to the downside – I find it tough to be extremely bullish or bearish here. Have some patience and good luck trading.