NEW YORK (TheStreet) -- Today was one fun day of trading in the stock market as the month of May came to a close. Since April 11 the S&P 500 has been on a tear to the upside, gaining 6%. Hats off to the bulls.
The DJIA on Friday finished up 18.43 points to close at 16717.17 while the S&P 500 closed up 3.54 to finish at 1923.57 after being in the red all day until the last 30 minutes of trading. The hedge funds programmed machines sure do know how to put on a show when they are in total control.
The Nasdaq closed down 5.33 at 4242.62 and the Russell 2000 finished down 5.57 at 1134.50. As we closed the books on May, the Russell 2000 index is the only index that is in "Trend Bearish" territory.
So, where do we go from here? The S&P 500 and the Nasdaq are both well into overbought territory. On a green open Monday both indexes will again be approaching extreme overbought conditions. This market is a trader's market and is not for the buy and hold crowd.
If you believe that it is a buy and hold market because the indexes have been climbing steadily higher, you have no risk management process. In sum, this market is coming down from these levels. Make sure you, as a trader, are positioned on the correct side or it can be painful. Chasing mo mo is a no-no for me.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV