I have a Bullish bias for the markets this week. Key economic, market moving data coming on Wednesday from the fed could lead to some tricky trading early in the week.
Charts with thoughts below:
SPX weekly chart… Currently at a level where we could see some resistance. That being said if you look at the overall chart we look primed to make yet another all time high. Higher highs & higher lows all year, this market has been a big bad bull and no reason to think any different until we get a weekly close under the rising trend line drawn on the chart.
SPX daily chart… Currently basing with sideways action catching it’s breath from the recent rip higher. This is bullish action in my view due to the fact that it’s not giving up any of the gains. Wednesday we have some key data from the fed and I expect this market to stay somewhat range bound until we know more from the fed. SPX above 1680 I stay highly bullish and even over 1670 I still think we are looking at another green week for the markets. Obviously 1700 and 1710 are our levels to watch to the upside if we try to break higher before fed day on Wednesday. There is a chance we make a move early in the week if people try to front run the fed news. In this situation, just pay attention to your levels and respect your stop losses because no one really knows what the fed will say and more importantly the market reaction to their news.
SPY weekly chart… Same thoughts as SPX weekly chart above (SPY is the ETF that follows the SPX) the chart is screaming bullish!
SPY daily chart… Posting this chart because SPY is the instrument I use to play SPX. 168 and/or the gap up area from Tuesday mornings higher open is the area to hold. This chart is flagging/basing and gathering steam for a move over 170 then to all time highs in my opinion. 169.50 is the resistance that we flirting with the last three trading days. A break and extension or a break and hold over 169.50 and I love SPY longs and will use that area as my stop while targeting a move to 170 then weekly target of 171+. I am prepared for choppy action to start the week and then a move higher to new highs overall. If we get a pullback that holds 168 area I may look to but the dip and use the rising 50/10 day sma’s as stop loss. As always, pay attention to your key levels and trade the price action and not the noise.
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