by scaredycatguide | January 11, 2019 2:21 pm
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.
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.
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.
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