Expect a Rocky Road Over the Short-Term

The trading range continues. Expect more of the same for the majority of Wednesday’s trading, that is until 2:00 EST when the FOMC Minutes are released. Typically, the market is volatile immediately following the report, but the vacillation usually ends 15 minutes after the release and then a trend usually takes over until the closing bell. I expect the historical tendencies to show up again tomorrow.

Currently , the major benchmarks that I follow are in a neutral state, so I do not see a defined edge at this juncture. However, I expect this to change with the FOMC Minutes tomorrow and the Unemployment Report out Friday. Be prepared for a rocky road as we enter the latter part of the week.

Our SPX Short Iron Condor positions are comfortably within the chosen 140 point range with 13 trading days left in the June expiration cycle. If the “sell in May and go away” theory continues to live up to its historical billing then the strategy should do very well this summer.

Overbought/Oversold levels for May 29, 2007

• SPY -  60.1 (neutral)
• DIA - 65.3 (neutral)
• IWM - 64.7 (neutral)
• QQQQ - 57.2 (neutral)
• GLD -  39.4 (neutral)
• OIH - 49.0 (neutral)

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