What Did I learn about the Market Today?
Today’s session on the SPY began with a significant gap down, breaching the established daily uptrend and testing the crucial 200-day simple moving average (SMA). This move initially suggested a potential shift in momentum. However, bulls quickly intervened, demonstrating strong buying pressure that prevented a previous gap from filling and effectively held the 200-day SMA as support.
Consequently, the market is now trading in a pivotal zone, positioned between the short-term 5-day SMA and the long-term 200-day SMA. With price action currently resting on this short-term support, the market has two primary paths: a rally higher from these levels, or a period of consolidation around these key moving averages. For bears to gain a stronger foothold and invalidate the recent bullish structure, they would need to see a decisive rejection of the 200-day SMA, potentially forming the right shoulder of a larger cup and handle pattern, as indicated by the red drawn line on the chart, simultaneously rejecting the purple trendline. Until then, the immediate battleground remains between these two significant moving averages.
There are usually one or two ‘big plays’ each day. If you identify what the ‘big plays’ are and the key stocks, trading becomes easier. Why? Because you’re getting yourself in the right stocks at the right time. Today, there were two ‘big plays’ in play as the market chopped in range for most of the day. The main play was 1) Opening drive with A+ ORB or MAL (Moving Average Longs) with overnight catalyst of Uranium stocks 2) Later in the day, we had another MAL but ended the day with negative divergence with MACD and a heavy volume sell-off. So, this is a market to take more into strength and little a few runners.
Personal Reflections
- What Did I Miss? Missed the Uranium play with the stock that had poor relative strength e.g VST. Missed some easier MALs like CRWD, HTZ & SE.
- What Trade Did I do? I traded a few MALs. Need to leave runners and not take all profits. Had a good Zomi scalp on 3rd entry.
- What Worked Today? Uranium, Gold & Cyber stocks.
Today’s SPY Trade Setups and Analysis
- Clean bullish structure off orange support TL and with yellow algo break.
- Another ZOMI off orange resistance algo and yLoD look above and fail.
- Lastly, there was a perfect inverse C&H off resistance at the EOD. Not sure if there was enough time for follow-through.
