SPY 5 minute 5Although I have not added the SPY or any broad market tracking etf’s as active trade ideas, I have been focusing my market analysis on the S&P 500 lately.  As such, I recently received a request for a suggested stop level on the SPY from someone short and would image that there are others out there currently short or looking to position short on this bounce.  Of course, there is no “one-size-fits-all” stop level for any trade as stops levels for each trader are dependent on several factors, including their own entry price or average entry price (if scaling in) as well as their unique risk tolerance & trading style.

With that being said, my thoughts are this:  Any move over 166 would be the first objective stop level for those already currently short, as that level is horizontal resistance as well as just above the 61.8% fib retracement level of the drop off the May 22nd peak.  Depending on one’s average entry price, including those interested in shorting between here and that 166 level, a stop not too far above the May 22nd high would be an objective stop area.

As far as new short entries or add-ons, one could certainly short here and use a tight-stop just over that 166 level.  I’m currently watching for, and expecting, prices to fall back to make a backtest of that yellow downtrend line where bullish traders will be looking to position long. However, I think that prices will continue to move lower from there if we do revisit that level.  If so, a break back below that downtrend line, especially once/if prices drop below the 162.50 & then, more importantly, the 159.70-80ish level, should open the door to the next wave of selling.

As far as the updated trade ideas that I planned to get out over the weekend, I got off to a late start with the market update posted last night and to make matters worse, my site went down last night due to a server issue at the web hosting company (hence, the reason I was not able to get that post out until 2am my time).  As I’m just now mentally coming back online myself, I’ll comb thru my watchlists and the existing trade ideas to share any trade ideas that might stand out.