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Strange Action But We’re Still Bouncing

Published 01/13/2016, 03:19 AM
Updated 07/09/2023, 06:31 AM
SPY
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"Develop success from failures. Discouragement and failure are two of the surest stepping stones to success." — Dale Carnegie

Another strong start to the day as this potential bounce takes shape but then we faded, then rallied into the close.

The close is the most important print of the day so it wasn’t a bad day in the end.

I am still watching very closely though since the action has been a bit mixed.

We’ve become accustomed to sharp hard rallies off lows and we aren’t seeing that so far this time.

So, on that theme, if we don’t soon see a strong bounce then chances are we will just chop sideways to work off this very oversold condition and I will be exiting my long positions since that type of move will just be a setup for a next leg lower.

So, I watch and react still when I see the need but for now, I remain long.

SPY Daily Chart

If we move above 185 shortly then we should be good for a bounce back up to the 200 to 202.50 or 205 levels, if not, I’ll be out and look for setups for the next leg lower.

I’ve still got a 10% weighting from 194.60 in the SPDR S&P 500 (N:SPY).

Have a great night.

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