Let’s See if This Spike Breaks Bad

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We had a sudden spike higher around noontime on the east coast when the IMF announced a lending facility for Euro Zone member countries. Previously, we have seen similar sudden intraday bursts based on news out of Europe only to see them quickly fizzle out, leaving eager bulls holding empty bags smelling like a baguette and stale French cheese.

Looking below at an intraday chart of the SPY, you can see the heavy volume that accompanied the spike, taking us up right near this morning’s highs. Also note a simple resistance trend line drawn back to this morning’s highs can potentially turn into support here. Indeed, it would behoove the bulls to hold this $119.20 area, or else this spike is in danger of, yet again, breaking bad.

If you are looking for individual long trading ideas, see some of the ones working very well that I posted last night here.

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