SPY daily Feb 12th
I am back in the office today but still preferring to keep things light for now as the near-term direction of the market is just not very clear. Although a longer-term bearish case has been made and I still do favor more downside to come in the following weeks-months, the intensity snap-back rally over the last several trading sessions does somewhat temper my desire to aggressively reposition short.
At this time, the SPY/$SPX is trading around the intersecting horizontal & trend resistance level which also comes in at the 78.6% Fibonacci retracement of the recent sharp move lower. Any solid break & close above this level would open the door to new highs in the S&P 500 as this is the last significant resistance level before the Jan 15th highs. To reiterate, based on my analysis of the longer-term (daily & weekly) charts as well as other metrics such a recent sentiment extremes preceding the mid-Jan highs, I continue to feel that the intermediate-term outlook for the market is bearish but would prefer to see some additional technical evidence, such as a resumption of the near-term downtrend. BTW- most of my short-term indicators remain on sell signals as of now, but will flip to bullish if the market moves much higher over the next trading session or two.
There are several trade ideas in need of updating which I hope to get to by the end of the week. Market analysis and trade updates will continue to be light for now as the near-term technical outlook isn’t very clear although that could change on a dime. I also woke up to error messages telling me that the primary hard drive on my main computer is at risk of failing so after backing up all data & attempting (to no avail) to fix the errors, I will now turn my efforts to restoring my data it to the backup drive, which could take a better part of the day. Feel free to contact me if you have any questions about any of the existing trade ideas. -RP