I try not to be downer here, but if you really believe this post-holiday, light volume retracement could be the bullish sign, then I must say, keep your seat belt on, and wait. The market tumbled drastically last week with heavier volume made me think this might be the time to sell. I have no more positions left for either swing or long-term investments now, thanks to the bounce this week. I am not saying I made a good decision, and I might even cry out loud if I realize I sold too soon. However, I just don’t feel comfortable to keep any of my positions right now, as I just too ‘chicken’ to place any bets… Cash is the king when I have this kind of feelings, that is the what I learned from my past mistakes.
Still, let’s look at the charts and see how the markets closed the month of MAY. And analyze some possible scenarios on how markets gonna act.
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1. SPY: I questioned the steepness of the trend line two weeks ago and expected a pull back. Then I saw the drastic sell off in last week, I wondered if it might not be just a pull back. Now, after the upward movement this week, I see no clear messages, neither up nor down. To be frank, if you draw a trend line again (red), it looks much better, which means the market could just go up from here, even though I doubt it could happen that soon. WHY? I just don’t trust post-holiday, light volume trading. IF I want to enter for long term investment, I would like to see a higher high appear on SPY, with stronger volume and momentum. I don’t really care if the blue trend line broken next week. I want to see a higher high at least closed above/@ $145 level. If the red trend line broke first, I MIGHT not wait for the lower low to rush in my short positions. Still, the support levels you should watch are $138.5, $137.5, and 135 and etc.
2. QQQQ: Qs had a pretty good run today, thanks to Dell’s strong earning. From the technical point of view, it covered relatively the best among the three. And its old uptrend line is still holding. NICE! But it seems to have difficulty to break the support sits around 50.20 area. Especially, with the weaker volume upward movement, I have to see the higher high to confirm the bullish trend. Otherwise, I will watch how will be the red trend line broken (volume and momentum).
3. XLF: Financial is still lagging behind, but I really happy to see it hold on above the supports at 24.40/24 levels. For the first week in June, I’d like to see whether those supports could still hold the selling pressure, or it could actually push the price higher. Don’t know, don’t say. Be patient and calm.
Good Luck and Happy SWING! 
