- Technically the MKT has produced a big positive technical shift signal and will need to hold structure if it is going to avoid a drop back into a digestive trade. On the SELL side UP FADE signals are valid but REVERSALS are a better option. Use resting profit limits and tight stops. DIR and DP BREAKOUT strategies are aggressive but do have the potential to profit from a quick negative move out of the extreme. Use tight position management as any unrealized profits can be erased quickly.
- On the BUY side accept DP FADE signals after confirmation. The MKT is extended and may search for stops before it resumes its Bull move. REVERSAL strategies are a better option. The sharper the break, the better for an entry with the expectations that the MKT is going to revisit the recent move high. BUY DIR and UP BREAKOUT strategies may need to be "worked" as the MKT is extended and has the potential to produce some starts and stops.
Today's PRICE MAP Performance for SP
- In a relatively quiet day in the markets, there was still opportunity to realize profits in the S&P 500. The market has produced a huge positive signal and will need to hold structure if the shift in sentiment is to be accepted. By putting the R at the DIR, the analyst is saying "prove it" to this positive technical shift. If price breaks below the DIR, there is a possibility for a drop back down into a digestive market state. The Market traded down to the DIR around 8 A.M., respected it, and began back up toward the minor level at 1437.75. When the price failed to make a higher move high around 12:30, this was an indication of structural weakness. When the price broke below the R just before 2 P.M., we knew just what to do, SELL the DIR BREAKOUT. This strategy is aggressive and demands tight position management. As it happened, there was a sharp sell-off from the R and wasted no time before moving down to the DP, a reasonable profit target considering the Market State and time of day.
