After a major drop early last week, Friday brought a change in direction. The markets bounced sharply. Today, we are seeing further gains, though smaller in the indexes. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $132.88, +0.55 (+0.42%). While the markets are bouncing for the second consecutive day, they are still below the $134.69 pivot 52 week high. As of now, this is called a classic retrace higher. The next few days will be extremely key to whether or not the markets will break out or turn down again. With confirmation to the downside, intelligent traders are starting to look for a secondary move lower. Traders will continue to look for this starting at today's highs at $133.32, as long as the SPY does not take out the $134.69, 52 week high. Should the market take out the highs again, then traders will look for further upside.
This maneuvering is based on technical pivots and the understanding of price pattern and time. By using these methods traders will see exactly when momentum switches and price changes from bullish to bearish or bearish to bullish. To gain more insight, market guidance, swing trades and education join the Research Center. Take a free trial today.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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