SPY &QQQ Bounce Targets

Regarding bounce targets for the US stock indices, a backfill of today's gap (i.e.- Friday's lows) would be the first key resistance levels. Personally, and this could change on a dime, I'm looking for a move up to just below the 104 level on QQQ and just below Friday's low of 197.52 on the SPY.

The term "just below" is relative, meaning that the price swings over the last few trading sessions have been unusually large and so I will most likely close my long-side bounce trades anywhere from 20 to 50 cents below those resistance levels, if not stopped out before then (I am manually ratcheting up my stops as the market climbs). The reason for this is that there will likely be a large number of "trapped" longs who were caught off guard on this move down & will be looking to exit on the first bounce to resistance. I also plan on closing at least half, if not all of the longs taken Friday afternoon & this morning. If & when my plan changes or I see any relevant technical developments I will communicate them asap.

I'm also open to the fact that we could mount a more substantial & lasting rally from these levels but as stated earlier, I'd prefer to let the dust settle & see how the market trades in the near-term before adding back too much exposure, long or short.

2015-08-24T12:15:34+00:00 Aug 24, 2015 12:15pm|Categories: Equity Market Analysis|Tags: , , , |Comments Off on SPY &QQQ Bounce Targets