The S&P 500 popped 1.3% Friday, extending Thursday’s gains, and the index closed at the highest levels in nine months. Not bad for a market that was in freefall three days ago.
This late-week rebound shouldn’t surprise readers of this blog. I warned bears on Wednesday to protect those mid-week profits:
And wouldn’t you know it, here we are two sessions later, and greedy bears let those nice profits turn into painful losses.
S&P 500 Index Daily Chart
This game isn’t hard to figure out once we recognize the patterns. This is not a directional market, it is a choppy, sideways one. Anyone betting on the breakout or breakdown is getting chewed up and spit out a few sessions later when the market reverses.
People who claim this market is fixed tell the rest of us they have no idea what they are doing. Obviously, this is a choppy, sideways market, and it is no one’s fault but our own if we let a bearish or bullish bias wreck our trades.
That said, there is an upward drift to this sideways, choppy trade. The gains are bigger than the losses, and that drift will continue next week. I will still be taking profits following big moves, but I’m riding this up wave a little longer.
Buy low, sell high, and repeat as often as the market allows.