Wednesday, September 28, 2016

Sloppy Market

The action reminds me of 2015, from March to August.  Just a mess of a low volatility chop fest, but with a grinding higher bias that was quite annoying.  Of course that ended with a vol spike, but this time, the vol spike just hasn't lasted as long and its back to the S.O.S.  Low volatility, occasional one day drops like Monday that act like resets so the market doesn't go too high.  Of course those drops have very little follow through, and the selling peters out.

The market has weeded out those that sell on weakness, and has repeatedly rewarded dip buyers who build up dry powder after a couple of weeks of grinding rally.  So these dips don't encourage more selling, but are met with an army of dip buyers who have been doing well buying weakness.  That results in markets like this.  Of course, once you get saturation on the long side, you finally get a big drop in one day like you did a few weeks ago as soon as a little bearishness comes in.

Tough here, but still expecting a bit more weakness into October, despite Trump losing the debate and seemingly having no clue on policy.


MM111 said...

Looks like we have resolved to the upside. Maybe now just grind quickly up to new highs.

MM111 said...

What a surprise - we are actually heading down.

Market Owl said...

I continue to believe that we will chop around like we did in 2015, with rallies having no lasting power, and the same with selloffs. Get ready for the chop. OPEC news is a non event, they will cheat their quotas anyway and Saudi will not be willing to cut enough to make a difference. And none of the others will cut.