June has started with more of the wild stock market action we saw in May. Tuesday saw another in what is a becoming a pattern of late day collapses, only to be reversed in Wednesday’s trading with a steady climb capped by a late rally. The SPX closed above the 200 day SMA and seems to be finding support at the February lows. Volume is tailing off over recent days.
This is a day trader’s market, with no clear directional bias, but the series of lower highs and lower lows and the clearly broken trend lines lead us to be cautious. Even if you want to swing trade, the action is almost too erratic to work with. There is buying coming in at support levels, so we do have reason to be somewhat optimistic at this stage, and the economic fundamentals in the US continue to be modestly encouraging, so we will keep a watch for some stocks that look like growth opportunities when market conditions improve.
Sprint (ticker: S), which we mentioned previously, and Apple (ticker: AAPL) are two examples of stocks which have held up relatively well in the correction. These are typically among the leaders when the market gets its act together again.