Bulls break us out!

overall market outlook, gap analysis, trade expectations

Yesterday we saw a breakout to the upside, with conviction. We broke through the 142.2 previous multiday resistance and never looked back. Coming into today we are seeing gap up follow through and I am in a clear ‘look for long setups’ mode. Coming into the day completely flat (as always) I will not be jumping in immediately looking for us to shoot to the moon. I have a handful of stocks I will wait for the morning excitement to settle a bit, look for some pullbacks/flags/bases and try and get on board for any second attempts higher.

Good sized gap higher coming into the day and I would expect some profit taking on the open. I am not looking to chase this excitement mostly because I am not getting anywhere near the kind of risk/reward I need. I am content letting this run without me. I missed the move and I am not looking to put my account at risk by chasing at these lofty levels until we put in some sideways/fill action.

I will loosen up my trade expectations today as we are in a clear long environment intraday on most charts. I will trail stops and look for more than scalps as long as the market offers it. Of course this could change if the market too decides to change character throughout the day, until then, I will be looking to let longs run.

• $SPY support at 142.9 – 143. Yesterdays high and close should offer support if we can fill the gap. Good risk reward long with stop below 142.6.
• $SPY resistance at 144.1. About the 61.8 retrace from the last leg down combined with some previous structure, should offer resistance, especially if we stretch and tag it today..