Bulls, Beware Of The Roll
$SPY last Friday is what triggered some initial caution as upper level support was broken in the SPY and then on Monday bulls reclaimed that lost 207 level only to have the rug pulled from out underneath them in today’s session.
Choppy, back and forth price action.
During times of indecision sometime’s it’s best to remove the daily noise and smooth out the landscape.
Here’s a chart of the SPY just showing the 8 & 20 period EMAs.
Notice the 8 period (blue line) is sharply pointing lower and 20 period (yellow line) has flattened out.
The pair is beginning to roll over.
If we see a bearish cross to the downside it would signal to me that control has shifted enough to the bears that I would no longer want to be eagerly looking for new long setups.
I’m not claiming there is any crystal ball or magic formula here, it’s simply the period that I choose to measure trend strength. I wrote more about this here.
But note, the bulls aren’t giving up easy here. Notice today they are on attempt #2 to drive price higher off those 206 lows and so far, doing well.
Closing prices is what I’ll be watching. Careful out there.
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