Aug

Summer Doldrums Almost Over?

I’m very much looking forward to the Labor Day weekend as it is supposed to mark the end of the summer doldrums. You know, the "sell in May and go away" crowd is supposed to come back from their long vacations and drive the market back up in anticipation of the Santa Claus rally. Should prove to be interesting this year. If anything I just hope the "action" picks up and the market finds a few sectors that actually start a real trend.

It’s fairly easy to see where we are now in the S&P but we don’t know which way it wants to go just yet. Here’s the near-term levels I am watching for a break out or down.

So it seems the market is working it’s way into a little wedge pattern that should resolve one way or the other in the next couple days. It would be a good sign to see it break above the green line although the way the market has been so choppy it is not a guarantee of a new bull market. As long as it holds above the red support we will try to stay positive.

So for now we look forward to the long weekend and hope the traders come back and drive it one direction or the other. This choppy, low volume, boring market has got to give way to some real conviction in one direction or the other eventually. Even the sector rotation has been weird lately but the "sell in May" thing worked well in 2008 as we can see above. If we can take out the high around 1320 we might be in for a run up.

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One quick note off topic here. My electric bill for July was about 35% higher than last year and what amused me was that I used significantly less kilowatt hours. They were kind enough to include a special note explaining about how natural gas recovery prices were so much higher to help explain the sticker shock everyone got this time around. It seemed odd considering the what the price of nat gas has been doing recently.

I guess they got the inserts printed up a while back judging from this chart. If I extrapolate my electric bill out a few years it seems like I’m going to need a cost of living increase to keep the lights on. I’m sure it is just an anomaly and can’t possibly increase like it has year over year. I’m certain they will lower my rates in the future once they get to recover their natural gas costs at the new lower rate on the chart above. Maybe they are charging me for the energy they had to buy up there at the top so I will be looking forward to a significant decrease in my electric bill going forward.

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