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Indecision With Confidence



Indecision With Confidence

We'll get a read on the consumer's confidence today but does anyone have a read on the market's directional confidence?

In the three weeks since the April unemployment report, the SP has shown little direction. Look at the chart below. Twelve days ago, the SPM (June futures) closed at 1139.50 and yesterday finished just a few points away. In between, we've seen quite a few headfakes via the "outside day" pattern (higher high and lower low on the daily). Yesterday was no exception as the SPM posted the fifth outside day in the last twelve days. Normally, this type of pattern would result in some sort of follow-through. However, the last four resulted in a change in direction with the next day's close (see chart).

Why do I highlight this? First, it's important to realize that the market's true direction has yet to unfold and, as a trader, don't let yourself get frustrated during times like these. Second, large market moves often come after a period of indirection like we're currently seeing. Stay on your toes!!

The Confidence data doesn't give us much help for the day. Over the last 12 months, the SP futures finished higher on the day of Consumer Confidence 8 times by an average of just .15%

Good Luck!

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