Step Into the Van

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Daytraders got an initial short entry this point on the gap up, as the SPY rallied right into the 200 day moving average for the first time in several months. Generally speaking, the first “touch” of a significant reference point offers a high probability day trading setup, even if it is counter to the intermediate-term trend. After the brief intraday dip, though, the bulls have resumed the move higher, as you can see on the second chart below on a 3-minute timeframe. So long as those morning lows hold, the bulls are holding serve in the aftermath of the gap up, and the presumption is that breakout and short squeeze plays will continue to work as the session develops.

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