Since Memorial Day the stock market has been in the Summer Doldrums. This is caused by many investors effectively going on auto pilot, so a relatively few can strongly influence market direction. Those shorting stocks have had the upper hand and there hasn't been any real positive news.
However we are now in earnings season and so far the reports have been on the positive side. It also will cause the large investors to take a break from their summer malaise and for the next two weeks evaluate where they want to be come fall.
I expect that they will want to have a fairly substantial equity position and will grab up many of the bargains out there. Of course at that point, the shorters will have to start covering positions and we should have a summer rally for the next few weeks.
After that we will go into August and resume the doldrums.
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