Market At Inflection Point

by OLIVIER on JULY 19, 2011

Although the market managed to bounce nicely we are still stuck in a sideways trading range. As a bull you want to see the S&P 500 take out the July pivot high and ultimately the May high. The bears want price confirmation to the downside. I am simply stating the obvious. As obvious as it may sound, the right thing to do is to wait for the market to show its hand. Obviously the smart thing to do. Then again, being patient, sitting on your hands and not forcing trades is not easy and requires a lot of discipline. If there is one thing I’ve learned over the years then it is the following:

Don’t churn your account. Wait for the best set-ups the market has to offer. Avoid second-rate set-ups like the plague.

That being said, there is not much else I have to say tonight. The recent strength of the miners versus the metal is starting to take shape. Sure enough the moment I want to write about it the miners get sold off. Still, a small pullback for gold and a resumption of this new up-leg might provide a decent entry for ETFs like GDX – Gold Miner ETF , GDXJ – Junior Gold Miner ETF and SIL – Silver Miner ETF. Speaking of gold miners, I’d like to see a lot more strength in CNL.TO – Continental Gold and SLW – Silver Wheaton. I consider both to be high quality stocks. Granted, this is a very subjective way to measure strength within the miners realm. Still, as long as I see stocks like CNL.TO not performing well this raises quite some doubts.

Regarding the stocks I am closely monitoring nothing has changed. As of yet, the stocks I recently added to my public list are still the ones I am most interested in.

Conclusion: The market is still in a sideways trading range and in the process of building up strength for a strong directional move. My best guess would still be for a start of a big move starting sometime in September. Either the bull market resumes or we begin a new bear market cycle. Interesting times ahead. That’s for sure.

In the long run, the majority loses. The implication for the trader is that to win you have to act like the minority. If you bring normal human habits and tendencies to trading, you’ll gravitate toward the majority and inevitably lose. – William Eckhardt

My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469