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US Stock Market At Resistance

QQQ is trading slightly above the 119.20ish resistance level which has contained this leading index ETF on all prior attempts, while SPY is also trading at resistance. As such, this appears to be an objective level to short the broad market for a pullback trade with the potential to morph into a longer-term swing trade. Also note that with all key price & momentum indicators still well below their previous reaction highs, any marginal new high will be a divergent high & as such, is likely to fail.

As the current trend remains sideways & very choppy, these are not official trade ideas, I'm just pointing out a potential pullback trading opp with a very attractive R/R (minimal downside if stopped out with a shot at a quick (1-5 day) pullback trade & the potential to morph into a multi-week or multi-month swing trade, should the market reverse soon & go on to break down below the recent trading range. Personally, I just took a shot at a day trade position of an IWM short here with the intention of booking partial or full profits before the close today but possibly bringing home a swing position, depending on how the market trades throughout the trading session today. My stop will be on 60-minute close above 125.22 with a minimum target of 122.84, again, reducing to a swing position (or flat) before the close if not stopped out before then.

IWM 60-min Oct 10th

IWM 60-min Oct 10th

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Oct 10, 2016 10:03am|Categories: Equity Market Analysis, Unofficial Short Ideas|Tags: , , , , , |5 Comments

5 Comments

  1. Whatthemark October 10, 2016 10:45 am at 10:45 am

    With the light volume, I could see the market makers propping the market to clear some stops.

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    • rsotc October 10, 2016 11:14 am at 11:14 am

      Agreed. That’s why I gave my IWM short position as little room, with my stop somewhat above the actual resistance level & basing it on a 60-minute candlestick close to boot. That will hopefully avoid any stop-raids & keep me in the trade.

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  2. Teeps01 October 10, 2016 12:13 pm at 12:13 pm

    Is IWM bull flagging do you think?

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    • rsotc October 10, 2016 1:06 pm at 1:06 pm

      IWM does appear to be flagging on the 5-minute but as @Whatthemark replied, that flag is getting a bit too big in relation to the flagpole. Certainly worth monitoring though, should IWM impulsively breakout above that flag-type small descending channel.

      Today is typically a low-volume trading day (Columbus Day holiday) as the bond market is closed but I would expect this market to either start moving up or down soon as traders should be returning from lunch now (1pm EST).

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  3. Whatthemark October 10, 2016 12:26 pm at 12:26 pm

    IMO, too long for a flag, look at the 5 min time frame and you’ll see it.

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