Lets start this idea by calling attention to all those who are calling for an imminent correction in the market. They are right... Yes I said it, they are right. "At Some Point" there will be a correction in the market. But when is the real question. And how big of a correction? Well it all depends on which or horizontal support line they believe in. Don't let this negative talk get you down. Watch the charts, pay attention, be light on your investing feet.
I want to make a quick comment about the . I know you can't see it but trust me when I say todays candle was an inside day. You have to pay attention to this inside day. The rule is that if Tuesday closes above today then you should expect higher levels for the spy . If Tuesday is another inside day then you don't have an expectation until the next day. If Tuesday closes below today then you should expect lower levels for the spy .
Now to the chart that you can see. Remember it is the Weekly chart. So signals may last longer than the ones we get on a . Notice the horizontal line. This week closed above this 5 month resistance line. IF there is follow through, you can expect higher prices. If the SPY drops below the week's low then you may be able to say this was a false breakout. The SPY could go lower in this case.
If you are going to invest you should have an idea of what might happen and what you are going to do if a particular scenario comes to pass.
I will say this about all the market. The big players who expect a correction will begin to capitalize on it as soon as it begins to happen. In doing so, they will push the market lower as they unwind their long positions and increase their short positions. You can hear it on whatever business news channel you listen to. The correction is expected and many worry about its depth.
If you want to make money on the way down, you too have to lighten up on longs and get short. I really believe the market is primed to go lower faster as compared to how quickly it has been rising recently. So hang on. The "immanent correction" could be steeper than you anticipate.
Have a great long weekend.