The market hit the 880 level, which was the final support level in my book yesterday. The end of the day, which was met with some serious buying (and not just short covering), was encouraging. Today's action plan is simple, and it is all drawn out on the 3-day chart below. I added a "blank day" so you can use it intra-day to see where the market is located. I do this everyday, and it is a method that I highly recommend.
The red box is "today". The green zone is your support level and the purple zone is your resistance level. The two blue lines in between are minor support and/or resistance levels. That's it. Don't make it any more complicated than this.
We are still in a multi-week consolidation, so you better be hedged. Play both sides of the market, or else you will suffer tremendously. I was down only -2% yesterday, even though I was (and still am) 65% long and 10% short. I will be doing some rebalancing, buying and selling stuff, ahead of the Memorial Day weekend. Don't forget that the markets are closed on Monday, so...you might want to plan ahead for it.
3 comments:
The daily $SPX chart looks like it'll gap up under the resistance, and slope down towards an 887 close.
The 1-month $SPX chart sure looks like a descending triangle. Isn't that bearish, not just consolidation? Although it looks like we need another 2 weeks and a bounce up toward 915 before it sh*ts or gets off the pot.
Hi John,
How do you draw the extra day chart from stockcharts.com?
I tried few times with no success.
Thanx in advance.
Won
Cliff, 887 EXACTLY! NICE!
Hee - you need a membership for Stockcharts. I'm sure they aren't the only one that can do extra spaces, but it's my favorite charting site.
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