Week #27 certainly lived up to its statistical promise and painted a positive week. But unfortunately it failed in delivering us the long coveted 3000 mark on the S&P 500. Which now may remain out of reach for the foreseeable future as the summer vacation season between July and August isn’t exactly famous for racking up record highs in equities.
The all time high thus far sits at SPX 2995.84 – less than 5 handles below SPX 3000. Consider for a moment the bearish sentiment that prevailed only a few weeks ago in early June. We’ve come a long way since then but as I pointed out last week, for various reasons investor sentiment continues to hate this rally.
Well if you’re feeling bearish then this may make you feel better. The next two months are pretty rough turf for equities. First we’ll have to make it through the low participation summer churn, which is followed by what is widely perceived as a bearish August.
The thing with August however is that it’s actually not that bad of a month. If you compare the up vs. the down months then you get to 16 versus 9.
Compare that to July, which stands at 14 to 11, thus actually more bearish on a percentage basis.
So what really ruins it for August is that when it goes bad – it really goes BAD all the way. But on average it actually scores better than July.
Crude unfortunately started to get squirrely and ruin what thus far looked like a great little break out campaign. Stop out occurred at 1.5R last week, which ain’t too shabby but I had bigger plans for this one.
The current formation looks interesting but given all that volatility I probably play it easy and wait for a breach > the 100-day SMA before considering a re-entry.
Copper is a goner at break/even and I think I’ll stay away from this one until I see a marked decrease in realized volatility. On a very short term basis however this looks like a perfect swing trading contract – assuming you can get a decent fill.
King Dollar is back on track and I just moved my trail to the 1R mark. If it manages to heave itself above 97.3 then we may in fact have ourselves a little runner here. Until the Fed of course stomps on it again.
As a side note: The EUR/USD looked like it was destined to rip higher a little over week ago but apparently news of Deutsche Bank reorganizing and slashing 20,000 jobs may have thrown a monkey wrench into that one.
Of course this has been a long time coming with reports galore over the years about problems at Deutsche Bank. The one question I have not seen anyone ask however is this:
How can you possibly fail as a primary dealer for the U.S. Federal Reserve?
Talking about being given every possible advantage and still striking out due to excessive greed and corruption. It simply boggles the mind. A fuck-up of this magnitude should be given its proper place in the Guinness Book Of Records.
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