One cannot help but try to draw parallels between today’s action and the nasty reversal that we saw back on June 21st of this year. As you may recall, back in late June we touched 1131, only to immediately tank for the next two weeks to 1010 on the S&P 500. The temptation is to extrapolate that today is yet another reversal, seeing as we are at the top end of our multi-month trading range.
Rather than choosing to become bearish based on emotion, or on a whim, or because of lagging/flawed economic data, I believe the better approach is to have a sound game plan. Looking at a slightly zoomed out intraday 15 minute chart of the $SPY ETF, all we have seen thus far today is a gap fill from Monday’s 2.20% rally. So long as we stay above that gap fill level, which I have illustrated, the trend of higher highs and higher lows since early July remains in tact. Should we break and stay below that level, the trend becomes in grave danger of being broken, and I will make the necessary adjustments in my portfolio.
NOTE: On the S&P 500 index, this level is right around 1107, which happens to be the low of today. On the $SPY, it is around 110.86.
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Thanks Chess,
Great insight! Let’s hope we stay above that level.
Thanks Hawaii.
Slopey-Dope:
You’re banned from my tab. Don’t bother posting here again. You have engaged in nothing more than false attacks/trash-talking, illuminating your ignorance and overall lack of familiarity with my work (which is documented).
I run a classy tab here and, accordingly, the trash belongs outside.
I hope this helps.
If I recall correctly,
that 110 range is right where Woodshedder
said to buy.
Yup. Wood has been en fuego.
Only Senor is steadfast with the deeper pullback theory. Everyone else going long from here. Still 100% cash except for some MOT
Chess – Just got back in and added to my longs. I agree of course. I smell a bear trap perhaps?
Could be–imho the close will be telling–but then again early next will be too.
Good stuff. i should SPY more often