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SPY Approaching Resistance, Market Update

SPY is once again approaching the mid-point of the multi-month trading range (purple line around 217) which has acted as resistance when tested from below & support when tested from above. While going long or short any broad market ETFs or their individual components for anything other than a quick 1-2 day trade still runs an elevated risk of the trade failing due to the choppy, sideways range the market has been trading in lately, I will say that a short entry just below 117 with a stop on a 60-minute close above 217.70 is certainly objective & offers an attractive R/R (minimal loss vs. the profit potential). The shaded boxes highlight how the SPY tends to trade above or below the 217 level once it final makes a convincing break above or below.

SPY 60-minute Sept 30th

SPY 60-minute Sept 30th

My own preference right now is to continue to focus on trading stocks with a little-to-no correlation to the broad market until we have a definitive resolution of the multi-month sideways trading range that the US equity market has been grinding around in. Updates were posted to a couple of those stocks (unofficial trades) in the trading room today including CANN, which just hit the final target for a 150% in just 16 trading sessions since triggering a breakout above the downtrend line as well as ACPW, another low-priced stock with a near-zero correlation to the broad market. The ACPW trade setup was highlighted in yesterday's trade idea video & broke out today, gaining 100% & hitting both price targets before coming back into for a backtest of the wedge (and may offer another objective entry here).

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Sep 30, 2016 12:54pm|Categories: Equity Market Analysis|Tags: , , , |6 Comments

6 Comments

  1. rsotc September 30, 2016 3:53 pm at 3:53 pm

    SPY printed a high of 217.12 so far vs. that mid-point line on my SPY 60-minute chart above at 217.12 & looks like we’ll close right around the 217 level. Objective time to add some short exposure for those willing to roll the dice as the markets are likely to either gap down or above that level on Monday & as this is a decent resistance level, odds favor a reversal (gap down).

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    • joefriday October 1, 2016 6:53 am at 6:53 am

      Yep…that close Fri may carry over to Sun-Mon open… Gap down may be the case..after that window dressing end of quarter Friday….

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  2. GetItRiight September 30, 2016 4:13 pm at 4:13 pm

    It looks like the 50DMA capped the advances last few days. Also, after 7 consecutive green months, this is the first red month since January. Not by much, open at 217.38 and close at 216.35.

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  3. Nick G. September 30, 2016 5:14 pm at 5:14 pm

    rsotc….thanks for heads up…SPY dropping within a minute of your above comment.

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    • rsotc October 3, 2016 9:58 am at 9:58 am

      Nick- Yep, I noticed that on Friday. SPY tagged a high of 217.12 vs. that purple R line at 217.12 on a very brief spike, reversed & made one backtest of the 217.07 R level before reversing & selling off impulsively on high volume into the close with that selling carrying forward in the form of gap & crap so far today. Shown here on the 1-minute chart:

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  4. Art September 30, 2016 9:21 pm at 9:21 pm

    Very nice call Randy! wow great timing!!

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