SPX Teasing the Bulls and the Bears
The S&P 500 is teasing both the bulls and the bears this week. After getting a nice rally into the first resistance area prices looked liked they were going to pull back.
Fake Outs Without Breakouts
Basically this is what we have been getting the last few days. The index opening higher only to sell off and just as things were about to rollover a bid comes into the market.
Yesterday, we saw a lower open and it looked like things were lined up for the first down day of the week. As I noted in my last post I put on a short position at the close on Tuesday, things were looking good with the lower open, but to no avail.
Luckily, I took one-third of the position off at the lower opening for a small profit, thus mitigating the overall loss I took when the remaining position pushed through my stop loss of 2595.
Ironically, the index never really pushed much higher. Managed to get just a few points higher than the prior day's high.
This has been a theme the last few days. We aren't getting any kind of real move to the upside, but we also aren't selling off either.
Essentially, it is easy to get chopped up in this if you over trade.
Where we Stand
Given the size of deviation from the 10 period moving average, a day of backing and filling at any point is in the cards still. Maybe it will be today, who knows?
There is no short position signal for me like there was yesterday so I am standing pat. If it goes lower then oh well.
As for the upside, the next resistance area is 2630. If price gets up there then I will watch to see if we get any kind of reversal signal.
Ideally I'd like to see price rip up to that 2630 level as then there will be some ingredients for a short position, however we could just as easily see it back and fill now and then move up there in an orderly fashion.
Point is - we must be patient and wait for signals to do something. At this moment I'm back to watch and wait mode.
Published by ScaredyCatGuide
on
Times like these are good for traders too...if they come to recognize them. They can take a step back and take some time off. Time off for traders doesn't come often.
Exactly, the greatest skill a trader can have is patience.
Great discipline buddy as its tough when you know (or think so) you are right about the trend and it fails only to be right down the road. I have had so many trades that were the right move but wrong timing... you lose either way!
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enough ingredients for me to enter short the SPH at 2582 after the opening (with an earlier placed sell on stop order),and looking to add more at 2560 on stop. (see my earlier post)
Interesting, if price pushes to 2560 and breaks that would open a larger possible move for sure.
Good luck with your positioning. I personally think the Fed is driving the market at the moment and it is responding to the speculation about interest rate hikes in 2019. Seems a dangerous market to try and trade for outsiders like us.
Yeah, the markets seems to swing with each breathe of the fed and what they will do. Need to be careful holding things over night or during any specific fed announcements.