SPY & SPX: Honestly, I'm surprised.

So, people are pretty mixed on this. Is it a long or is it a short.

The reality is, SPY/SPX has not been a short over the past 10 days really. Over the past 10 days, if you longed right off open and did not sell until exactly the close of the day, you would have been very profitable 70% of the time. This is something I back check to vaguely ascertain the current modus operandi of the market. With that, one would say it may be bullish?

But the fact is, technically it doesn't really pave the way going forward. Its more of a vague reference thing that I do to sort of see where the market is at currently. But I never use it to pre-plan anything and use it more of a reality check for my permabear thinking.

That said, let's recap last week because it was such a friggin mess.

SPY:
Probabilities said: SPY was weak bullish to 395.
I thought: SPY would hit 395 and cap out around 398 and then tank to 388 (the reference target).

What actually happened: Parabolic upside. PARABOLIC absolute upside. We did see some tankage but really we are ending the week at over a 1% gain.

SPX:
Probabilities said: SPX was bearish to 3840 and reference target was 3912. And thought it had only a 10% chance of hitting 3971

I thought: I didn't think anything because I actually didn't pay attention to SPX this week. My mistake because it was much more clear.

What actually happened: It did hit the high probability target and dropped even lower, but it also ripped through the 3912 target like it was nothing!

99S:
Thankfully all of our 99s were hit this pas week, SPX, SPY, UPRO, UDOW, DIA and IWM. So faith maintained in these targets haha.

So what about next week?

This is where I am surprised. Its actually semi bullish apparently. Probs give the likely target on SPX of 4026 Not an overly aggressive target but its still pretty big because it means that its going to break back over that resistance line you see in the chart.
Overall, the probabilities assign an 80% chance we hit 4026 and a 40% chance we see the low target of 3895.

For SPY, the high target assigned is 401 and the low target is 386. Probabilities are kind of neutral on SPY with a slight bullish bias, but marginal.

Reference target for SPX is in the chart, it is 3969 and for SPY it is 394.

For Monday:

Probabilities on SPY are intra-day slightly bullish with the potential for a gap down. So if we do see a bit of a gap down, don't get over-zealous being short biased. Be careful and wait for your thesis to be confirmed.

My plan:

My personal plan is to focus on long entries. Yes, I have to hang up the permabear hat yet again :-(. At this point, the PA, the previous 2 week behaviour and the probabilities are saying that bears are fighting the trend. So I don't want to be apart of that. I will opt for the line of least resistance. In terms of the S&P, I am taking it day by day. Not really wanting to swing this at this point. But generally, until these high targets are taken out, I will try and focus any intra-day positions on long entries. If we see these targets taken out fairly quickly, I will have to reassess.

The caveat is if we see massive capitulation just materialize. Then obviously, I will shift my tune. We have a fed speaking on Monday and on Friday its PCE, so if there was I day I would prospectively label as a likely short it would be Friday with PCE results. But we will see what we get.

As always, we will see where the 99s fall and I will update as info and setups materialize.

Safe trades everyone!

Trade closed: target reached:

;)