I’ve been a bit out of touch lately, eating copious amounts of fresh, local seafood, knee-boarding, surfing, and playing super Dad.
I have been keeping one eye on the markets though, and I can say that this pullback is the healthy pullback I’ve been looking for.
Not so long ago, I put up a post with resistance, and you can see from the chart below that the resistance was broken, and now we have pulled back to rest right at resistance (now support).
And this is where it gets critical. We do not want a false breakout, which many traders consider to carry more weight than the breakout itself. The SPY should hold above $113ish if this rally is to continue.
Worst case scenario for the bulls, we continue breaking beneath the area of consolidation at $112.50, and again trade beneath the 200 day moving average.
It would not surprise me at all to see this happen, considering that so many traders were watching the former resistance level to be broken.
However, I will follow the path of least resistance, and that seems to be upward. Therefore, I am expecting support at this level and not a breakdown.
Thanks for the report. Now get back to vacation. You have only a couple of days left!
if you use the 200ema you will see that it never broke above it in the first place and that this will be a false breakout.
Forget about the dumb market, now go enjoy the fine bounty of the sea, like lobster or scallops and a fine NY strip next to it with butter and a nice Chardonnay
Power Dip is killing it today!