The Worst May in Half a Century

Yesterday morning showed slightly positive futures, and the market gapped up quickly, hitting tops on the theoretical Dow of 10,355 by 10.30 a.m.

I'm glad we did not have a new signal yesterday, as my concern on if we would stop a support line (we did not by 2 pm.) or start trade ranging again (we were by 1.00 p.m.)
Volatility spikes occur with electronic traders, hedge funds, but the last few days have seemed "slower" despite the swings. That's just my personal read on it.

We continue to hold our OTM July OEX 400 Put. It's priced now at .30 average yesterday, and we think remains a buy. We have two positions now. Again, we are choosing a very OTM issue because of the risk of the market. If there is a large downturn, this cheap put will make lots of money. If not, it's a better return on investment stop loss candidate for what the stock market has become.



We experienced the Worst May in half a century. How has this week fared? Look at the Dow opening Monday morning of 10,136. Study the closing for each day of the week, and compare to our Dow projections. We've never experienced a bell curve count (1-10) that has been so extreme as to register 12 and 13 until a week ago, to only move to almost a 0 bell curve in one day.

This is the sign of a uncontrolled market. Your study of what has occurred this week may help you gain the perspective of the general trend of the market. Study your PNF charting on both the OEX and the Dow in different settings. Remember, it's all free on www.stockcharts.com

In zero velocity the human brain will will scan endlessly, like a computer, in the attempt to impose order on chaos.

This is in our characterology.