Not Much Action

Sit Tight During “Holding Pattern”

By Bryan Bottarelli
Wednesday, May 07, 2008 11:03 AM EDT
Wed, 7 May 2008 15:03:00 GMT

Dear Bottarelli Research Member,

As you can see from the chart below, the Dow is sticking right at the 13,000 level. And over the last 3-4 days, it seems like any 50-point move below this level is bought while any move 50-points above this level is sold. This officially puts the major market averages in a holding pattern.

INDU

You see this same action on the S&P 500. We’ve discussed the importance of the 1,400 level in these pages before, and while this level appears to be holding, there is no upside momentum to fuel a solid move above this critical level. Therefore, the same conclusion applies from above — which is the fact that the major market averages remain in a holding pattern.

SPX

In situations like this, I will not “force” any new trades — simply because a situation like this does not offer us any edge. In other words, unless I uncover a trading opportunity that places the odds for success squarely in our favor, the best advice I can offer is to remain on the sidelines. Therefore, let’s maintain our ABX June 42.5 Calls (ABX FV), but hold off on any new trades until we get a better picture going forward. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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