I’m not saying they should come back.<\/p>\n
In fact, at the lows, I called “foul”<\/a> on the bears for bringing the market down without complete information.<\/p>\n But lately, the market is suspiciously stuck in a holding pattern.<\/p>\n And as it stagnates, my concerns grow for the investors who chased the highs of the recent relief rally.<\/p>\n That’s because it seems that this recent rally may have reeled investors closer to 4200 than 3900.<\/p>\n Let me explain…<\/p>\n On May 24<\/a>, I explained why 3900 was a great area to buy using an analysis of volume distribution for each price level.<\/p>\n Here’s an updated version of that chart…<\/p>\n You can see how a triple bottom was hiding in the volume at the 3900 level. Meaning, the S&P 500 found support at 3900 three times in May. (The red sections represent days where the market closed lower, while the green sections represent days where it closed higher.)<\/p>\n But here’s what concerns me now…<\/p>\n When you combine all the recent price action since the lows, the volume profile shows investors chased this rally near the highs around 4125.<\/p>\n In the chart below, you can see how all that volume accumulated around this area… <\/p>\n This is exactly why we’re stagnating. The buyers already bought, just at the wrong price.<\/p>\n With the Volatility Index (VIX) still above 25, a Fed meeting next Wednesday, and a big quad witching futures and options expiry next Friday… prices are guaranteed to fluctuate heavily.<\/p>\n That means stop losses are likely to get triggered at the wrong time. Typically, the longer it takes investors’ new positions to turn profitable, the more likely it is to trigger a stop loss.<\/p>\n![\"Chart\"](\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202206\/20220610-jmu-01_kqp375.png\")
<\/div>\n![\"Chart\"](\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202206\/20220610-jmu-02_kqp375.png\")
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