As you can see we created somewhat of a double top from March to the beginning of May and now we have a Bearish Flag pattern setting up on the chart. (see Bearish Flag post from earlier this week) With the conditions deteriorating in Europe with Spanish banks in trouble and Greece still needing to decide if they are going to stay in the European Union this problem is hanging over the market like a dark cloud.
I would suspect that next week is not going to be a good week. There is so much uncertainty and that favors the bears. Buying puts or being short next week is what I am looking to do because there are plenty of opportunities.
A word on Greece and Spain with Europe. This is a real problem that Greece is going through, and I hear a number of people say its a small country with a small GDP. But the country is a leech. Think of Greece as a sick patient who's terminally ill and he keeps taking other patients medication in the hope he'll get better. All the while the other patients (Spain, Italy, Portugal and other European countries) with out their medication cant get better.
So it's somewhat of a perplexing situation they have over thire but as traders we need to recognize this is affecting the supply an demand in the market, and we have to be ready to take advantage which is right now many of the charts are say get short. We know eventually our economy and other will mend themselves and their will be other opportunities when we see a bull run again. Remember we are still in a bull market relative to 2009.
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Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives
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