My view on the market is encapsulated via a chart on the SPY for the past several weeks. We have been in consolidation mode for 16 days now. I am starting to wonder if we will continue to stay in this range until earnings seasons begins. Each time we have moved to the 126.60 support area buyers have stepped in. Today we moved almost two points higher from support. And my two main long ideas LNKD and AMZN exploded to the upside.
It is apparent from this visual as well that we have spent a lot more time in the lower part of this range than the upper part. If we are going to break to the downside at some point the sellers will have to prevent such large bounces from support. A bounce from 126.60 that doesn’t breach 127.50 will get me to start thinking about a downside break. And a move with force below 126.60 to 126.30 or so would have me aggressively short with an initial downside to 125.
On the flipside if we break above 130 I will be looking for a move to 131.50ish. And by the way, I have no emotional energy invested on which way we move. That’s how it should be for all short term traders.
One Comment on “My Take On The Market”
Great thoughts Steve. I’ve been considering a possible move that might happen where it appears the 200day is holding in the S&P (like now), buying comes in, and then we have a shakeout move to SPY 125/SPX 1250 that shakes out some longs, only to have 1250 hold from the earthquake lows.
I’m keeping my risk managed on my swings (things like CERN, WYNN, ARMH), but if we happen to have the shakeout, ill have a keen eye on what did Not participate in the shakeout, to add some of those names to my basket.
Cheers