The SPY is back to an area where, in a normal market, we would expect overhead supply (price resistance of former trapped buyers at the highs) to kick in.
However, we know the current market is an outlier, with the S&P 500 Index not correcting 10%, nor testing its 200-day simple moving average since 2012. Since then, time and time again overhead supply has been ignored in favor of a V-shaped rally to fresh highs.
Thus, the question is whether the trap will persist, or instead we will have a trap within a trap and this time overhead supply will matter.
I have no clue as to whether this is it. But I do know that the below chart can help me define risk for any trade I take, long or short.
I am still inclined to think, however, that the many broad market divergences will pressure bulls into next week.
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It is Shark Week after all.
http://www.discovery.com/tv-shows/shark-week/#!/thu
If the top is in we need to see this rally fail soon. By the 19th or 20th. I may dip toe in on shorts soon. I have a probe out on LVS right now.
You sir, aren’t allowed to say that…..http://ibankcoin.com/bluestar/2014/08/07/near-term-low-coming-soon/ /I kid
I tend to agree with you guys but I’d ideally like us to get to that big gap fill area……1970 spx/16900 on the Dow.
I agree with that projection. 16900 is 1.2% higher. if that happens between now and early next week I think you take a shot there.