clevernamegoeshere

SPY - all time highs, time to short?

AMEX:SPY   SPDR S&P 500 ETF
168 1 3
Disclaimer: I have no position in the SPY             . Yet. When I swing trade it, I prefer shorting because when we're hitting these all-time highs over and over again, it's a more reliable way to make money. Intraday is a different story but irrelevant to this discussion.

Short answer: not yet.

Long answer: SPY             has a history of getting smacked down every time it makes a new high. The trend this year has been when it was brushing against the top-line of a 5-year channel. We are currently only at about 70% of the top of that channel, which means we still have some bullish room. We didn't even touch the speedline we've created with the year's highs. Even if today closes red, it might not matter--algorithms are colorblind.

If, by some chance, we break below the key 189.69 support at open tomorrow, then we short and we've got a long way down to go--up to 7 points (around 183), but at least 2.5 or so at ~187. If we break our speedline at 190.72 then we go long with conviction for a couple of points as we head for the upper levels of the channel where we will flip short.

You could make some money by shorting here, but you'd have to be willing to hold through new highs if the market stays bull . We know it's *eventually* going to go back down because "First Touch Always Fails", but determining where that failure will occur is the tough part. This is a relatively rare instance where I recommend waiting for the trend before committing to a swing trade; from here, there's too much risk without enough gain.

And this, my friends, is why I like to hang out and just wait for a good short signal in the current market. So. Much. Simpler.
It nailed that 187 target but couldn't break below ascending support with any conviction. Every day closed above that line. That established strong support at that level and we spent some time accumulating before popping hard on the 21st and slamming through ascending resistance.
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