Sitting in Limbo

June 26, 2006 · Print This Article

The wait is on! A trading range mentality usually sets in the week leading up to a fed release. Over the past few years any directional move before or immediately following a Fed meeting has been quickly reversed. Will it happen this time around? It truly depends on the verbage within the fed release. If the message is hawkish, which is expected, we could be in for more oversold conditions in the near future. Currently the market is in a neutral state, although it is inching its way towards an overbought condition with the Russell 200 leading the charge.

I am leaning more towards a hawkish scenario, but it truly depends on how the market reacts to some strong support areas that are currently in place that should give me insight as to where this market is headed over the intermediate-term. If the market tumbles without a fight from the bulls there could be a rough road ahead for the bulls. Luckily, we really don’t care which way the market moves and plan on taking advantage of what the market hands us.

RSI Wilder (5) for June 26, 2006