What Did I learn about the Market Today?
Today’s trading session on the SPY saw price action fail to gain acceptance below yesterday’s low of day, indicating some underlying support. However, the day concluded with a bearish candle, positioning the price below a now-declining 5-day simple moving average (SMA). This suggests that short-term momentum has shifted to the downside.
For the bullish narrative to reassert itself, a calm retracement towards the 200-day SMA would be ideal. Such a move would allow the 20-day SMA to potentially cross above the 200-day SMA, forming a “golden cross” – a long-term bullish signal. Technically, the SPY could find further downside towards the gap around the 570 level. A more significant pullback could see price action extending down to the 50% Fibonacci retracement level on the daily chart, a common area for trend reversals or consolidation.
Looking ahead, the market is entering a short trading week due to the upcoming Memorial Day holiday. Given this abbreviated schedule and the holiday context, it is generally anticipated that significant directional moves or major market events will be muted in the interim. This quiet period could either allow for a technical bounce to support levels or provide a slow drift towards the downside targets mentioned.
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 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? I missed a few gap and go plays with ASST and SNOW. A few TML had good ORBs or MALs as well. PONY was on my watchlist and removed it. I’m going to have to have (3) theme tabs to separate FXI and Cypto.
- What Trade Did I do? I traded a few MALs. Got a good entry on MSTR and it just broke down immediately. Had a poor scalp choice in the wedge of doom. Also, did a stupid weekly fly and then took a nap only to have a massive end of day reversal.
- What Worked Today? Cypto stocks,, Gappers and MAL
Today’s SPY Trade Setups and Analysis
- ZOMI off of red algo resistance and break of green algo under resistance zone
- Another ZOMI off purple support algo and yLoD reclaim
- Lastly, there was a perfect H&S break off orange algo toward the EOD
