As crazy as this market seems it’s actually acting technically perfect IF you are trading it range-bound. We came into yesterday telling our readers in the previous night newsletter that our game plan was to short $SPY 119 resistance. We gapped a bit over and then ran straight down for many good shorting opportunities. We came into today with 114 $SPY support — the last chart we included in last night’s newsletter.
114 was trend-line support and it held like a champ as we are now 3.5 points higher on the intraday bounce.
Now the plot thickens — with two clear trend-lines above and below the current print. One more time through the 20SMA on the daily could do the trick and nullify this bearish pattern. On the other hand one more trip to 114 and 112 is next stop.
Either way we believe we’ll be leaving this range soon which will likely coincide with the end of summer trading. Gun to head we like the long break more than the short break, but at same time we’re not willing to ancitipate an edgeless pattern with hard-earned money. Once the range breaks we’ll go into the closet and grab back the swing-trader’s hat but for now all cash by EOD is our modus operandi.