It is all about follow through .. $SPX

Good morning. 

I won’t bore you this morning with my witty post.  Yesterday I talked about my whippy trade which I don’t usually do.. How does my past trading help anybody.. What we need to know is how to trade today. After all past performance in not necessarily indicative of future performance.  I just somehow got zip-a-dee-do-dah stuck in my head yesterday morning.. woke up with a nice profit and then changed a few word to the happy tune.  BTW Miley Cyrus does a horrible new version that is available on you tube. (not worth it).   So I had a title and went with it. 

 

On to today,  the take away from what you are going to read below is that we need follow through.   We are stuck in a consolidating pattern with bulls doing their happy dance when we reach the top at 1100 and the bears doing theirs at 1060 area.. Neither able to get the follow through to make a trend.  So we are stuck in this 40 SPX point trading range with the bulls turn to show a breakout.

Quote of the day:
Great people talk about ideas, average people talk about things, and small people talk about wine. – Fran Lebowitz

 

Breadth Charts

 

Chart

Score

 Day-1

Change

40 DPI

+6

+2

+4

52 WNH

+6

+2

+4

10 DHL

+6

0

+6

Total

+18

+4

+14

 

We have maxed out the breadth score on our three indicators, nine views.  We gained +14 points over Wednesday and the charts are looking ok.  So the bulls have it on their side (momentum) and now they need to see if it is enough to overcome the bears and the wall of worry they have created.

 

$SPX chart:

 

I cleaned the charts up a little this morning.  They were beginning to look a little ragged from days of use.  You can see our chop zone here from 1060 to 1100.  We have made a little cup from 7/16 down and then back up here now.  It is all about a breakout above 1100.  The futures currently are up about 4 points $SPX so the good news is that the starting line won’t be brought back.

 

Today to remain bullish I would like to see any downside contained at 1081 area (1080).  If the bulls can defend that today I will give them a point.  The bears on the defense end of course need to defend 1100 (actually I am going to call 1103).  If they repel the bulls they will get a point.  A break above and some gain the bulls get more points.

 

Above 1100 I have 1103 (I have revaluated it to 1103.81 for the precise amongst you) .  Above that is 1115 and  then 1130.  Starting to get into some big numbers.

 

On the downside besides my  “please hold 1080” area is 1077 then 1070.  Technically the bears could run it all the way back down to 1065 and the bulls could remain ok.. but everyone is getting impatient and we want a move one way or another.

 

image

 

Hopefully my confluence post is included in this email. One of the lines in the sand we watched yesterday live the trading room  was the 500 EMA.  We put up the current value (1097.59) on the charts to watch and see if we could break through and what do you know.. it became the high of the day.  So we will watch that again today.  The current gap up has us opening right at that spot. image

 

Trade On.

Marlin  aka RedlionTrader

 

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