Trading the election results

overall market outlook, gap analysis, trade expectations

Futures are all over the place, ping-ponging back and fourth between cash SPX 1410-1425 ($SPY 141.6 and 143). As a day trader I am looking for opportunity, in any direction. My instinct is to be more long with a 1410 open and short bias if we opened towards the top of the range towards 1425. The reason is simply because we are in this wide trading range (with some air pockets in between). I doubt I will be trading the SPY itself, but its necessary to know where price is trading with respect to value while taking trades in other equities. In other words, if I see a great short opportunity in another stock and the market is not settled down into support at 1410 I will much more willingly take that short with more conviction/size knowing the market has more room to easily fall to the downside.

One thing I will say, if major support at SPY 140-140.5 is convincingly breached we should see selling volume intensify and I will be looking to jump to the short side or at least step aside from any long setups. Point is I do not want to go into the day trying to short INTO support until there is enough evidence it is no longer a value buy area. Same holds true for 143 top range long breakout.

The gap is all over the place but mostly settling at the lower end of this range as of 8:20 EST pre-market. I laid out my initial fade the extreme plans in my market overview with an asterisk that is subject to change if we really build momo and break extremes.

30-Minute key SPY levels
  • $SPY support at 140.6-141. major support zone.
  • $SPY intermediate resistance at 142.6-143.
  • $AAPL – looking for opportunities to sell short. Apple is gapping down this morning below yesterdays close and low. If it cannot get above 578-580 area this is toast to downside. Prime short on my watchlist.
  • $GOOG – looking for opportunities to sell short. Google is another on my radar. If it loses the earnings lows of 672 this could see some fast and furious selling. I will not short into support but if I get enough evidence of a breakdown I will jump on board.

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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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