This is one of the more difficult spots of the bull market to date given the various crosscurrents that exist.
Let's look very logically and unemotionally at what has happened to date:
We started the year by having one of the worst first quarters on record midway through, only to bounce perfectly off of a key support area as pessimism was at historic extremes.
We have seen a substantial bounce take place that has reconfigured sentiment, although bearish sentiment (or perhaps more aptly an unwillingness to commit to the market on the long side) is still pervasive among investors.
Nevertheless, the market paid attention to a very minor resistance point at S&P 500 2100 which has resulted in a very standard pull back over the past couple of weeks.
So we're basically stuck between a major area of support down around 1880 for the S&P and a minor area of resistance around 2100. This range-bound action is occurring just as technology is disassociating itself from any general trend in the market with a significant bias to the downside. Other sectors continue to show relative strength, but with the weight of a bearish technology sector the market will inevitably become sloppy.
This becomes even more the case during what is going to be an illiquid summer trading season as hedge funds continue to face redemption requests in the midst of general confusion among managers while retail investors remain perpetually absent.
Add to that general bearish sentiment among a majority of investors marked by deep skepticism and incessant fear within what is sure to be the Barnum and Bailey's of presidential elections and you have the formula for a stock market that only wants to hurt you.
This is not a statement of bearish or bullish significance it's a statement of malicious intent against both sides of the trade. A sideways market that is running 100 miles per hour to nowhere while wearing flip flops, skinny jeans and some stunner shades.
In other words, a market that makes no sense.
