It’s been a volatile month. After rallying from the May 6 “flash crash” stocks have been up and down, hitting the correction mark—a 10% drop from the most recent market peak. This week brought more volatility as investors have become concerned not only about Spanish banks but also about geopolitical tensions in the Korean Peninsula.
So, what are the odds that we are at a meaningful low? As a technical analyst, I watch chart patterns carefully for signals, so let’s look at the charts.
What do the tea leaves charts predict?
Let me put my technician’s hat on again. Given the oversold condition of this market, my best guess is that we could rally from here. I suspect the market may be volatile all summer long, before possibly heading higher later this year.
The week’s news brought more indications that the U.S. economy is on the right track but chugging along more slowly than many had hoped. The economy’s first-quarter growth rate was revised downward, but durable-goods orders, home sales, and consumer confidence rose. Ongoing concerns about fiscal problems in Greece and other European nations continued to weigh on capital markets in the United States and abroad, creating some volatile ups and downs.
Keep in mind:
Past performance is no guarantee of future results.
Sounds like it’s time for a tax cut for the rich.
