We look at the SPY and VIX to determine where the markets are headed next. Today could have been a short term bottom, especially because an inverse head and shoulders on the 60 minute SPY is forming. Nevertheless, a false bottom is what is needed in the market to bring us to new lows. We have underestimated the power of a 3rd wave in the market before, and we won’t again. We put in a trade Long XLF and Short QQQQs yesterday, and that provided us with great upside. That being said, we believe that going overall short on the market will yeild nice gains in the longer term (1 week-2 week) time frame, although a potential continuation of a consolidation could be at store for the next 3-4 days.
Duration : 0:5:34
www.freetradingvideos.com: Using candlestick charting we’re reviewing trendline relevance used for both day trading and swing trading
Today I look at where the market topped out and how the volume started spiking up, up about 50% from yesterdays volume. Even though the bears get a very short term benefit of the doubt, we are still trading in an ascending channel and the 200 SMA, which is at 940.23 and is very close, will be a target for the Bulls to want to touch. Therefore the level of 898 remains extremely important as the bulls could want to reverse at that level, a break of that level will mean that the bears have a free ride to the support of the channel and eventually break down the support. The reason the S&P has not been able to break to new highs is due to the weakness in financials. The XLF has broken down a longer term support line and confirmed 2, 60 minute candles below it. Unless we see a push higher for the XLF early tomorrow back into a symmetric triangle, the XLF could shoot down all the way to 11.17ish, where it has strong support and resistance. The S&P will follow the XLF as it has in the past. I also look at SRS very briefly as it shows signs of bottoming out.
Today we just give a small update on the SPY as we believe lower prices are here to stay for the short term. This move is really potentially a longer consolidation move for this market 3-4 week market rally. We will start looking at strong support levels tomorrow if we continue to fall down as predicted.
Hey guys,