The market gapped up this morning despite yesterday's weak close and remained choppy for most of the day. Short-term traders were a little bit frustrated that the bulk of today's trade was taken away by the gap up, and it still feels difficult to trust this market right now. Today's lazy drift epitomized Summer trading, which was fitting on one of the hottest days of the season so far in New York City. The S&P finished the day up 0.95%, the Nasdaq up 0.82% and the Dow tacked on gains of 0.69%.
The market is currently trying to claw its way back from oversold levels, and could potentially be helped by end of quarter window dressing as this is the last trading week of June. Right now there is not much edge to trading this tape. At this stage it would be best to let this market to settle out a bit and raise cash for what could be more clear-cut opportunities. "Less is more" while the market is in corrective mode. The action could pick up once earnings season gets underway. The kick-off to earnings season is generally considered Alcoa (AA), which reports on July 8th.
The S&P is holding above yesterday's low of 1560. Holding above this level for multiple sessions is healthy for the S&P if it wants to try to reclaim the 100-day moving average. The S&P could see a move back to 1600, and then bigger resistance would come in at 1613-1618.
*DISCLOSURES: Scott Redler is long SPY, YHOO, BAC, GS, JPM