jhudson2
Short

Bye SPY

AMEX:SPY   SPDR S&P 500
Volume descending in a rising wedge into strong resistance. SPY likely to continue to the downside tomorrow.
Comment: zoomed out
Comment: zoomed further out
Comment:

oof rejection on the 1 min candles
Comment: Closer and closer to the drop...
Comment: today SPY looks ugly

Comment: SPY still in a narrowing rising wedge with volume decreasing
I think your analysis of the daily chart is spot on. Hungry Hippo may be exploring a personal idea of his about "computerz melting" the volume. Volume drying up is a key confirmation factor for the rising wedge that we see on the chart though. This comes from investopdia on the 6 traits of a rising wedge, "Volume: Ideally, volume will decline as prices rise and the wedge evolves. An expansion of volume on the support line break can be taken as bearish confirmation."
So basically just wait for a red day with big volume that moves price below the wedge. Go short there with a partial position. Wait for 1 more daily candle to confirm the new bearish trend, then go short with a full position size.
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High volume indicates a bottom on index ETFs, look at last Feb. Volume decreases when the computerz melt up the market like they did last summer. (Nobody sells if the index is moving up.) Since SPY is tied to the index, it can move up without any volume. Look at the May rally.
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jhudson2 hungry_hippo
@hungry_hippo, thanks for your clarification. So here the rising wedge, not the decreasing volume, is the key indicator of weakness
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@jhudson2, no prob. I was thinking along the same lines as far as the wedge, but it needs to touch bottom then the top again. Should wait until it gets closer to the point of the wedge before shorting.

I expect the market to melt up for 2 more weeks, just like last January. Flipped all of my puts after open and bought calls, I knew it'd close the gap. You'll know for sure if tomorrow is an up day.
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@jhudson2, the problem with shorting stocks during a melt up is that it goes sideway when it;s supposed to go down. Look at NFLX and AMZN the past couple of days.

I managed to make money on some SPY puts by flipping them on open, but I actually went long on DIA calls today. It's a lot easier holding calls than trying to time puts when the market is melting up.
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balanar_NS hungry_hippo
@hungry_hippo, Interesting concept........ Im new into options trading ETFs. I bought 1 put 257 of SPY today. I have always used volume and resistance/support to help make my investing decisions.
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hungry_hippo balanar_NS
@balanar_NS, obviously volume means nothing for index funds since it does not represent volume for the index itself. Look at volume on $SPX, It's fairly consistent, so pretty much meaningless.

That being said, SPX futures look weak right now so you might make some money. I don't think it'll tank, but who knows.
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hungry_hippo balanar_NS
@balanar_NS, also, a wedge shape can be much larger than you think, look at SPY from April through end of September, one large wedge with multiple bounces. Note the crash didn't happen until the point of the wedge.
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