This market has been on steady decline since we’ve moved into May. This is where the typical adage of ‘Sell in May, Go Away’ comes in. The market has been going through a bend but don’t break mentality. Now something like that is usually saved for the football field, but it seems the markets would rather slow drip rather than flush. 
The slow drip makes it more difficult for traders as it steals volatility while still moving us lower. It also complicates finding a bottom. Typically we will see a big flush lower and get some oversold bounces come out of it. Unfortunately at the rate the market is moving it is hard getting into oversold territory.
The big question is, is the line going to hold? Will we continue to bend or are we going to break and really flush this market down into the 1290 support zone?
To no surprise we are seeing a lot of volatility come out of the EU nations. This is spiking up overnight volatility but keeping intraday volatility capped. The markets have been selling off into the close in almost every session letting us know people are not interested in holding stocks overnight.
Any good news for the bulls? Nope. None… Well we can look forward to some bounces come through them market. Right now we are evaporating the short setups at a rapid pace leaving the ‘easy’ plays and moving into more risky plays. Normally when this happens we will see some move in the opposite direction to help reset the charts. So good news for the bulls is we should see a day or two of green.
However, I am not looking for the bulls to reclaim this market. We would need some substantial gains being put in and I just don’t see that happening with the EU all mucked up right now.
Taking a quick look at the S&P 500 I would say the bulls need to reclaim the 50 day moving average before placing the ball in their court. I think if we do get some solid bounces out of the market it will be a great time to start looking for those shorts again. Until then everything stays on a tight leash and cash is king.
