Waiting Out the Weakness

As everyone who has been with us for a while knows, one of our rules is "Don't trade every day." Despite Jim Cramer's claim that there is always a bull market somewhere, some days just don't make for very good trading. Friday we experienced some weakness on what we believe can be attributed to expiration. Yesterday we did not get a strong recovery from that weakness and stocks again moved back into the choppy mode that has been so frustrating of late. Today we struggled with scans. Set ups that looked promising a day or two ago now look a bit limp. Generally when this happens we will see more weakness before strength returns. At a minimum we would expect to see today start out weak. A late day recovery would be promising, but we may see this slow drift downward continue into Wednesday. Trying to buy this weakness will only lead to more frustration as support levels will likely be pushed against or even temporarily broken. Late in the week however we should start to see buyers push the market higher as end of month buying kicks in. Traditionally this period starts around the second to last trading day of the month and lasts into the third trading day of the new month. Today is a good day to sit on recent gains and wait for set ups to firm up a bit.