Sideways consolidation or volatility?

As expected the dip buyers have been showing up on even the tinniest pullbacks. They will continue to do so until they get hurt at least two or three times. Only then will we see the much needed sharper pullback that would set the stage for this market to stage a very impressive rally that has legs.

We are not doing much long side trading at this point due to the extendedness of many stocks. Our largest concern is that the market consolidates in a sideways fashion without offering the sharp pullback we're looking for. We certainly do not want to deploy our cash at these levels, however if a sideways pattern persisted long enough we would be compelled to do so. Markets can correct extended conditions with either sharp pullbacks that shake people out or long periods of sideways consolidation. Mutual funds prefer the later while Hedge Funds and traders prefer the volatility.

Only time will tell.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________

Click Here To E-mail Comments