All stock indices rose up sharply at the start of today as the headlines blared:
“The bulls are back, global recession concerns vanish and ‘Fear of Missing Out’ prompts a wave of optimism and jump in exposure to equities and cyclicals"
(source: Bank of America)
Prices rose just enough above Resistance1 for $SPX $NDX SPY QQQ TQQQ to trigger protective stops for bearish positions, and buy stops for bullish positions. Then came the afternoon sharp reversal downward. Enough to cause pain for the late bulls, and regrets for the stopped-out bears.
If you have been following our short-term trade setups, you may have entered long at Support1 in the last couple days, and taken profit at Resistance1 today. You would have made small amounts of profits.
If you have been waiting for the pullback to enter long for the intermediate terms, you probably groaned in disappointment at the start of the day, but felt glad you didn’t jump in once prices reversed in the afternoon.
Meanwhile, market internals continue to deliver a firm short-term bearish message under the hood. However, prices can still drift higher, widening the bearish divergence. This makes our trading decisions much harder.
The rest of this article covers:
Table of support and resistance levels
Projections from market internals
Planning your trades
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