Everything has played out just the way I expected. I told you all you to raise cash weeks ago then deploy it when we hit the 50dma on the pullback. Now have had a low volume bounce back to resistance forming what potentially could be a “double top’ for you pattern pikers.
I see this as a good time to raise some cash if your a swingtrader:
Look at the chart of $spy Its getting to an extreme overbought level while we approach resistance. Also look at the volume on the updays since the pullback to 50dma. Its lower than the downdays on the way to the 50dma.
Trading Lesson for different styles of traders
1. Breakout traders buy above resistance: $spy 108 or short a break of support.
2. Swingtraders short at resistance (108) and buy at support(which was the 50dma)
Thats one of the tough parts of deciphering whats on twitter. Styles, entries, and exits. Why does one person buy low on the bottom and others buy so high but they both make money.
On stocks above 5 dollars I almost always swingtrade which means im looking for stocks sitting on a strong support that are starting to get oversold.
Summary: I see no big edge at this level or chance of big breakout over 108 since we are overbought. Raise cash…chill out….dont be “that guy” you know him…the kind of guy who blows wet farts at a funeral thinking its funny (it totally is).
I am going back to 50% cash till we see a pullback.
Today I have added $spy short at 107 area with stop above resistance
Short $x 43.74