Another massive gap up overnight without a material change in the outlook. Fourth short squeeze in a row of near identical magnitude. A relief rally was always possible after the recent correction. But, this one was much larger and more vicious than I had anticipated. We're up over 7% in 4 days. That used to be a decent annual return. But, price action is driving sentiment at the moment, and wild assumptions, and optimism based on those assumptions, is validating price action. In other words; the cart is being put before the horse.
We're approaching the final resistance levels here at 350, which is the top of the triangle, and 354, which is the long-term Green trendline we lost on Oct 19th (it's also the previous high from Oct 12th). If we break above these levels, imo it would mark the official end to the bearish thesis, based on my technical analysis. I expect to see a strong rejection at these levels, followed by a swift correction back to low 320's, where we may see an interim bounce, before a resumption of selling down to the 300 level.
Best of luck out there today guys, remember to trade tight stops, and always hedge against risk in uncertain times. The FED is not your friend, and market makers are happy to take the opposite side of your longs right now.
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We're approaching the final resistance levels here at 350, which is the top of the triangle, and 354, which is the long-term Green trendline we lost on Oct 19th (it's also the previous high from Oct 12th). If we break above these levels, imo it would mark the official end to the bearish thesis, based on my technical analysis. I expect to see a strong rejection at these levels, followed by a swift correction back to low 320's, where we may see an interim bounce, before a resumption of selling down to the 300 level.
Best of luck out there today guys, remember to trade tight stops, and always hedge against risk in uncertain times. The FED is not your friend, and market makers are happy to take the opposite side of your longs right now.
If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research.
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350 breached, and SPY marching toward the final resistance line and the previous high at 354. This is the final showdown between the bulls and bears, before SPY recaptures all-time highs. Are there any bears alive out there? We'll find out soon enough...
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We're still trending up here on the day. Although, just like Monday, and Tuesday, we saw weakness around 11AM. Yesterday we didn't see the trend roll over until around 12:30PM. Let's see what happens as we approach the afternoon session...
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Vix catching a bid here and getting some support at the 100 day MA (27.60). We're notably off the morning lows, as the majors begin their daily afternoon roll over...
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That's all folks. A large gap up overnight, and then we traded sideways all day. The bulls were able to break 350 and hold the line. But, let's see how tomorrow shapes up as we end this crazy, and truly historic week. Have a great night. Cheers, Michael.
