On Monday morning I discussed how the SPYs would probably hit resistance around $280 and find support around $270. Mondays high was $280, and the close on Tuesday was at $270. Yeah…I know….I was right once again…blah blah blah…yay me.
But now things aren’t as clear. Bottoms are always harder to identify than tops. On Tuesday I closed out the short position I entered on Monday and I am now I the sidelines. The market is oversold and there will probably some short-term support around $270, but the levels aren’t clear enough for me to take a position.
If we rally, once again I will look for resistance around $280. However, the more important level to watch is $260. This is where the recent lows were. There is support around this level because it is where the lows were earlier this year. If this level breaks to the downside, I think that it probably means that we will be going into a serious Bear market. My guess is that this is will happen, because interest rates have been artificially low for too long and now the ‘chickens are coming home to roost.’
Image Source: bullsheadtrading.com
Image Source: bullsheadtrading.com
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