SPY Short-term Target Hit. Long-term Sell Signals Triggered.

I just wanted to reiterate the importance of defining one’s time frame when trading.  The market analysis on RSTOC, as well as many of the trade ideas share here often use charts of varying time frames (e.g.- 60 minute, daily, weekly, etc…).  Typical swing traders, trend traders and investors should not be overly concerned with the intraday charts (15 min, 120 minute, etc…), other than maybe to give a heads-up or early buy/sell signal on a trade.  The current scenario laid out on the 120 minute (2 hour) time frame for the SPY shows an expected bounce off the T1 level, which was previously stated as 177-177.50.  As I type, the SPY has so far hit an LOD of 177.12, smack in the lower end of the target range and close enough for very active, short-term traders to book some profits on shorts or position long for a possible quick bounce.

I will almost always give a higher weighting to the longer time frames and what the bigger picture is telling us right now is that the major US stock indices have recently broken below key uptrend line support on the daily time frames (with some at or near minor support levels).  Those charts can be view in real-time via the Live Chart Links page under “U.S. Stock Indices”.  There are many ways to incorporate the market analysis and trade ideas posted on RSOTC.  In the example above, nimble, active traders might try to profit off a quick bounce off this first support level while typical swing traders might decide to take advantage of any bounce today to add some short exposure.  A more conventional, less aggressive trader might even wait until the AAPL earnings are out of the way and wait to see the markets trade below today’s lows or even print another close below the daily uptrend lines/wedge patterns before adding any new short exposure or further reducing long exposure.  The important thing is to define your time frame and trading style in order focus on the technical events that are relevant to your trading and tune out those which may just be “noise” (i.e.- the very short-term gyrations in the charts).