Good Morning. What will this week bring us? Will the low volume, computer driven, rangebound price action of last week continue? Will their be a breakout in either direction? For now the waiting game continues. Will Jackson Hole in a few weeks be enough to hold markets up. And will the subsequent FOMC in September and hope for a market friendly Presidential election continue to buoy hope (excuse me, markets)? It’s possible. And when you read the discussion on human psychology, there is certainly a basis for that scenario.
Or will the lack of volume at these heights simply be unable to keep a bid under the markets? Last week we saw a sharp reversal in bearish sentiment so perhaps the contrarians which seem to be the majority these days will forego that argument. Volatility continues to pullback as there is excessive complacency here.
The temptation to put a trade on here whether it be long or short is great. Yet I continue to believe it is patience that will be rewarded. Patience does not necessarily mean the move will be a downtrend, though I see that as most probable. I mean patience in waiting for a sustainable trend to develop.