- Stocks rally on a wall of worry.
- Sell in May and go away.
- Bulls and bears make money. Pigs get slaughtered.
- Don't fight the Fed.
- Don't catch a falling knife.
I detest cliches because for every time they apply, I can find you an instance when they didn't. My point is there are few absolute truths in the market.
The latest cliche circulating the blogosphere and mainstream news outlets is the notion that because equities are rallying on both good and bad news, that that is bullish for stocks. What a crock of you know what!
I remain highly confident this is nothing but a ginormous distribution pattern on low volume. You only have to look at the volume distribution on the SPY to get a sense of what is happening:
Yahoo Finance hasn't updated their data for July 6 but I can assure you today will mark the 6th session since 6/11/09 where volume has clocked in below 200M shares.
Some would argue that since the market has sold off on low volume that that is bullish. B.S. I say! The average volume on up days has been 211, 540,250 shares traded vs. 218,886, 200 on down days (about 3.5% higher). This is clear distribution to my mind.
What is working for me at the moment is staying slightly short and exiting quickly with partial profits (yet leaving some positions on) and trading ES intraday. There is no way I am staying long overnight in a market where a single event will cause a massive sell off.
ES SYSTEM
ES system had a one decent trade today banking +4.5 points but nothing too big to be honest. I had another ES trade towards the end of the day (during that very predictable ramp up job) but strictly speaking it was not part of the public system.
