As each session goes by, building value higher daily, it’s important to keep in mind the possibility of a pullback in the S&P future contract. The first thing sellers are going to have to do is stop the advancement. We have yet to meet a selling force of equal or greater value to the intermediate term buyer. They want in and they’re willing to initiate trades at higher levels each progressing day.
This week I’m hunting for signs of the seller. Tell tale characteristics of a seller are value pushing lower as measured by the VPOC, a wide range distribution day with broad based selling that takes out prior day value areas, and fast rotations to the downside. Giving the markets current levels, action of this nature should not come as a surprise. Rather we should prepare ourselves mentally for such market behavior and have a plan for addressing the downdraft.
My focus is on locking in profit in names I currently hold should we see the above signs play out this week. I still plan to play the short term with potential short squeeze plays like GTAT. I’m also going to stick around and ride a correction out if needed in my intermediate term holds like GS and CREE.
Taking to the profile, I’ve merged and chopped the sessions from the beginning of last week to get a better idea of the distributions. I’ve split open last Thursday’s profile to give you a look at the “P” shaped profile that signifies a short squeeze occurred. Notice the hard drop out of this area when 1494 was lost. I want to continue to monitor this level as critical. Next key support is 1486.25 where we saw a strong buyer reaction twice. Should they not show up to defend these levels a third time it could signal a change in the market’s tenor.
If we keep levitating press your winners. If a name comes into a big resistance level FOR THE LOVE OF WINNING take some profits.
