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S&P 500 Choppy Stock Action Not Worth Trading, So Take Some Time Off

"I always laugh at people who say 'I've never met a rich technician.' I love that! It's such an arrogant, nonsensical response. I used fundamentals for 9 years and got rich as a technician." -- Marty Schwartz

NEW YORK (TheStreet) -- We've had some poor days this summer, but Tuesday has to take the cake. Things looked OK Monday, but today things fell apart. Up, down, then a feeble attempt at up again, before we began to roll over again into the close.

There is no point in being in stocks at the moment unfortunately. It looked like we were going to have a busy and profitable summer, but it has instead been marred by small loss after small loss for the most part, with some small gains thrown in as well. That is never fun. Still, we may be able to get some decent trades on earnings news, starting with Google  (GOOG) (GOOGL) later this week.

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Bank stocks did OK today after some nice earnings. They sure do have nice margins after taxes, fines and all other expenses. Must be nice to be a bank....

Gold (GLD) tried to bounce today, but failed hard. The few miners who held up Monday collapsed.

It did looks like stocks were going to move nicely higher as soon as Fed Chair Janet Yellen ended her talk, but the moves were short-lived and subdued. It looks like it's fine to take some time away from trading and enjoy the summer for now. But as I said, we may get some trades come up shortly, with earnings coming out more and more now. Time will tell.

Small size and tight stops are essential for now if you're taking any trades in my view. This chop should set us up for a nice move into the fall, which is the strongest time of year generally. But there may not be too much to do before then, if things continue the way the summer has gone so far.

Let's look at the S&P 500 SPDR ETF (SPY) index chart.


The S&P 500 ETF is rangebound between $198 and $196 still. Really, if recent history is any indication, a move either way should be pretty subdued.

A nice long consolidation period would be best for the continuation of this bull market. I've heard some questions recently about why I say the bull market only began in 2012. Many of you believe the bull market began in 2008, as soon as the low was put in at 666 on the S&P 500. My answer is simple.

The base from 1999 to 2012 was just that: a base. The breakout in 2012 is the official start and all clear to this current bull market. The action before that was all just completing the base. I hope that helps answer some of your questions since I can't get back to every email every time.

Enjoy your evening and Wednesday and maybe a few days on the links or the beach.

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