How the next six months will fare ?

First six months ended with double digit gains in all indices.

Next six months may be more challenging.

Fed has created a "major uncertainty" by indicating that they are ready to TAPER as soon as they can.

Market hates uncertainty......

When uncertainty rules then market marks time....

May 22nd was the first hint of TAPER.......

On May 22nd we hit 1687.18

On Friday, June 30th we closed @ 1606.28.......so far we have pulled back 80.90 points or 4.79% lower....this after rallying from low of 1560.33 which is low point of Bernanke slump.

50 DMA sits @ 1621.72.......

It looks like that for now, we may have a trading range of 1622+- on the high end &1560+- on the low end......we generally test support few times.......

Next 90 days Fed potential action may be "the focus of this market"

It is important to note, that longer the basing period stronger rally may erupt.

Range trading for four months is not bad @ all.....it is healthy for long term gain......

Summer has been noted for slow growth & vacation time on Wall Street & Europe.

When Money Managers are sitting with 15% gain in their portfolio, there is no rush to take unnecessary risk.

Lately in last decade.....there has not been much of a gain for most Money Managers.......thus a desire to lock profit.

Against this backdrop of low trading focus by big money, market may not go too far from where it is today.

IF your portfolio is giving you return in this environment, then it is more important to focus on locking gains. This market will give you many chance to buyback same stocks repeatedly.

BLOG does NOT give buy or sell.

Saleem