Backing and Filling Week?

A quick note about this week, which is fairly light on major economic reports:

Expect some digestion of the prior week’s gains this week.

The Stock Trader’s Almanac
notes that this week, following June’s quadruple witching, the Dow has been down 14 of the past 16 years. (That’s a pretty serious stat)


Dow, 60 days


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What's been said:

Discussions found on the web:
  1. ndk commented on Jun 19

    I’m one of the many people who expressed scepticism of the 300 point pole-vault last week here on your blog. I continue to be extremely suspicious of the market. That sort of rally wasn’t healthy and shows just how frightened everyone is of missing out on any gains.

    Until the mentality shifts to fear of the downside from fear of the upside, we’re going to sink. We’ll sink after that too, of course, but the first step to healing is admitting you have a problem. That will take a long time for those accustomed to such a long period of bull market. Remember that the RUT and most global indices hit all-time highs recently. When the QQQQ and other bull markets ended, everyone sloshed into the next. We stil know nowhere but up.

  2. B commented on Jun 19

    Backing and filling? More like taking a nap. Volume is freaking pathetic. We don’t need selling, all we need is a dearth of buying to see bids drop. Underneath the bid is falling on cyclicals today and there appears to be no buyers yet on anything else. IMO best case scenario is retest of the lows. Likely a powerful move starting later today or some time tomorrow.

    Let’s see what they do after lunch.

  3. Mark commented on Jun 19

    Retest and failure. JMHO. If the market is looking ahead like it’s supposed to, then it can’t like what it sees.

  4. rick commented on Jun 19

    so why did Barry get so bullish last week,
    did he already sell ??

  5. Mark commented on Jun 19

    I don’t know but Saut sold a tranche into strength I know that. IMO, the fact that NYSE BP Index has fallen to new lows means there’s a huge weight hanging over this whole thing and that “tradeable lows” are just a trap. But I could be wrong.

  6. David commented on Jun 19

    I made a small pro-bounce bet last week and another this morning.

    I think we hit a fairly signficant, cycle low last week. I’m looking at a weekly chart of the S&P 500 and a trend channel from the 2004 lows. The last two weeks are pretty suggestive of a bounce, to my eyes …

    Based on the width of the channel, I wouldn’t be surprised to see 70-odd points of upside in the S&P 500 and a test of the 1300 level.

  7. Barry Ritholtz commented on Jun 19

    No sells yet — I am looking for a run somewhat higher and somewhat longer — but new highs are probably a long shot

  8. Mark commented on Jun 19

    We’ll see on the re-test what this market wants to do. No harm done by Barry’s call to step in right there so long as sell discipline is enforced.

  9. whipsaw commented on Jun 19

    I am looking for a run up into the 1280-90 area over the next couple of weeks, followed by a fairly grinding slide to 1140-ish by October. I’ll buy some puts at 1280+ then bail out as the bottom looms, but I really don’t know if I’ll get into calls then at all. I have lost my interest in counter-trend trading thanks to some unfortunate experiments in forex a couple of years ago and am of the opinion that this is already a bear market, so I’ll just wish you guys luck trying to catch the upswings.

  10. David Sternfeld commented on Jun 19

    So many bulls. When everyone’s fully invested, from where does the cash come to bid shares higher?

    The bear market began in January 2000. The rise from 2003-2004 lows? Counter trend rally. Make way for the next BIG leg down.

    Since early May, we are out of shares, owning only short treasuries, gold bullion, and gold & S&P puts.

    Why be bullish with the fundementals all against us: a highly inflationary war with no end in sight, phoney inflation numbers, energy and commodity price spikes, highly worrisome housing weakness, uncontrolled trade and fiscal deficit growth, and global central bankers making credit (to keep pace with the dollar’s descent) faster than real productive goods can absorb (or retire the debt w/o reschedule or write-off)?

    No wonder some are sitting on the sidelines. “The wise are not busy, nor the busy wise.” Lao Tsu

  11. whipsaw commented on Jun 19

    per David Sternfeld:

    “So many bulls. When everyone’s fully invested, from where does the cash come to bid shares higher?”

    You are forgetting that there is still a lot of pent-up stupidity out there. Smart money began scaling out of this market at the end of January which was also about the time that the Common Chump decided to have a go in earnest, as usual. What is seen as a brewing disaster thru clear eyes may be seen as “an opportunity to build a value portfolio” when viewed thru the prism of the financial media.

    If it is insipid enough, they will come. And I will be waiting for them again. 8-;

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