The market continues to be news driven and Europe is causing a lot of concern right now. We still sit in the trading range that I have spoken about much over the past month. We seem to be spending more and more time in the bottom half at that range these days, which isn’t an encouraging sign.
I remain skeptical and in fact am starting to get defensive in nature. My gut tells me that we are changing trends and getting ready for a down move. Unless I see some convincing strength this week (and really on or before Wednesday), I have a feeling we will resolve the trading range to the downside.
I don’t expect a revisit of the lows for 2011, but if we do break to the downside, I expect it to be a relatively significant downward thrust … maybe 8 – 10%.
The good news is that I think we will have resolution over the next few days … so there shouldn’t be too much uncertainty for long. If the bulls want it, they better step up soon to prove that.