Friday, July 1, 2011

Pre-Presidential Year Update - The Back Half Begins.

Welcome to the back-half of the year. Here is my seasonal projection chart:

In May the market diverged from the projected average of the 4 year cycle of the last 5 (20 years) seasons. The final week of the quarter is exhibiting a classic bounce - a big energy candle closing above the immediately preceding doji's. This pattern represents a low-risk entry on the bullish side but don't jump in here with market orders. You want to place buy-limit orders in the low 1300 area, just above the top of last weeks high. Let the market come to you,  irrational exuberance is not to be expected here. The stop-out area is around 1250. If you get in then take half off in the 1350-1370 area where resistance was in evidence in spring and move the stop on the running-half to break-even.


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