Thursday, June 16, 2011

Buy the first test, never the second

We have a saying in our newsletter to “buy the first test, but never the second”.  We explained this in our previous $QQQ 200SMA test post.  Today was the second test of the 200SMA in only 2 days — and not surprisingly it didn’t hold.  Next big support is near 53 on the trend-line.
We wrote in the newsletter last night “Bulls finally got their big rally day — however, on the big picture it looks like it’s just a pause before we go hit the trend-line (or chop around until trend-line catches up)”
Trend-line currently near 1240 — that’s our next big support spot.

We only made 1 trade today (the $SPY trade we tweeted) and we have no interest in being active in this market until we see better edge.   A wash-out to the trend-lines could bring that edge.

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