Our nice little rally is hitting a bump in the road. No surprise as you can see we are up into resistance, the red line, and the seasonal has a minor down tendency for a couple of weeks here. What to do?
I exited my long on Friday, taking profits. I had hoped to get a little more out of that trade than I did. I have several things that are showing potential tops, but the first one shows 4/11 then 5/22 and 6/12. With all that it mind I think this pullback will be a buying opportunity, but not for a couple of days. The seasonal gives us a general idea, but as you can see, it has already been off a little so just becomes a visual crutch. I have found that in general seasonals get followed but at times can stray. As a result it is just one thing to consider, but cannot be the sole criteria used.
The one fly in the ointment which could trump all of this is that the government is doing everything they can to foster a continuing anti business climate. If they continue to do this all bets are going to be off on the downside. I still think we will see new lows, but they rally prior to that I thought would carry further than we have gone so far. It is possible that all of the pro-union anti business planning and out of control spending could cut the rally off short. We have to watch this pullback closely to see.