Can we expect the modest bounce to continue next week?

May 19, 2006 · Print This Article

The market finally got bounce, albeit modest, today. SPY bounce hard off the 200-day moving average and was able to stay above it all day. My guess is that this level will be tested again early next week, as post expiration has a historical tendency to trade lower early in the week, especially the Monday following options expiration. DIA and QQQQ seems to be the laggards of the major indices and if we do test the lows again and can hold, a trade to the long side could be in the cards. You can never be too careful in market llike we have witnessed over the past week or so. Sometimes, sitting on the sidelines is the best answer. If you are investing for the long-term why take the unnecessary risk by placing a trade. As I always say, patience, patience, patience. Traders that were not patient this week and tried to go long really had it handed to them almost every day this week.

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