Cash Market Trading Resumes!

overall market outlook, gap analysis, trade expectations

After a weekend and 2 closed days for the cash markets we’re gapping up into the upper end of our trading range we have been carving out in the SP500 for the past 4 trading sessions. My outlook has not changed, until we see a definitive break of this range (see levels below) expect the chop and 2 way action to continue. There has been no recent directional commitment and the more days we spend trading within this 1 and a half point range on the SPY the more energy we are building for the inevitable breakout or breakdown.

We are gapping about a half a percent higher in the SPY into the 142 resistance zone and we should expect some profit taking in this area. Last day of the month we could see some funny action as funds move around some positions given they missed the last 2 trading days to do so.

I am still in a very nimble, in and out mentality, as far as trade expectations go. With a lack of directional commitment on the 30 minute timeframes it is easy to do more damage trading then it would be just sitting on my hands. Any trades I take today will likely be for scalps unless we break up or down from this range.

30-Minute key SPY levels
  • $SPY support at 140.60 – 140.8. intermediate term critical support zone to hold. Bears need to crack this with commitment to accelerate downward selling.
  • $SPY resistance at 142.3. intermediate term ceiling this market has not been able to breakout above. Through here and that should pave the way for some early short covering and aggressive longs.
  • $AAPL – looking for opportunities to purchase long and sell short. The recent shake up of apples management has this stock gapping down over a percent so far pre-market. I do believe there are a good number of trapped longs in this name holding over the weekend that were expecting upside follow through. The 591 pivot low will be important from Friday. I don’t have any actionable setups planned but the obvious spots to watch are Fridays low and high.
  • $PCLN – looking for opportunities to purchase long . If the market does get its upside breakout today then priceline looks poised. If it can hold the 575 area it should be in play to the long side, with not much in the way until minor 590 level and then bigger 600.
  • $AMZN- looking for opportunities to purchase long . Looking for some follow through from Fridays rip higher and potential change of trend higher. Eyeing 234-235 zone for a possible long entry this morning.

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Evan Medeiros

Evan is the founder of the Trade Risk. With 25 years of coding experience and a B.S. in computer science, Evan brings a systematic discipline to investing in the stock market.

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