Don't Read Too Much Into This Week's Action

Look for volume this week to drop back to levels normally only incurred during the week leading up to the Christmas holiday as most of the remaining market participants take off for the beach. It's difficult, and probably unwise to try and cull too much meaning from last week's and now this week's activity. Last week was more representative of traders trading with other traders than it was of actual supply and demand. This week should be more of the same. With this in mind, look for both breakouts and breakdowns to fail. Bet against meaningful price action and look for stocks and indices to bounce between support and resistance. With volume levels low, it will be easier to manipulate prices and gun prices temporarily higher to take out the short's stop losses. Likewise, it will be easy to drop prices below support and take out the stops for longs. We plan to be very conservative this week, only trading where we can see a very clear advantage to do so. Next week promises a fair amount of fire works; though the jury is still out on whether there will be a market breakout or breakdown.