For 36 trading days we have been below the $136 price in the SPY, there have been NO buyers above this level, only sellers waiting to take profits. Our first bounce off support after going into a down trend was at the 200 day moving average, not much time for confirmation we bounced and zoomed back strongly after losing and regaining this popular support level. For 15 trading days the $131 level has held strongly as end of day support. What does all this mean? We are in a choppy range bound market: $136/$131 is the price range we are stuck in until we get a catalyst to send us trending in one direction or the other. Until we have a break out in one direction $131 is the buy level and $136 is the place to take profits in the SPY after bounces at these levels.We have a price range established and two key moving averages to watch for what to do next.
I am not interested in stocks as long plays until we break above the 50 day in the SPY or bounce off the 200 day again in the SPY. I will be sticking to the short side as long as we are below the 50 day hoping to catch some down trends to the 200 day. In my trading the 50 day and 200 day are lines in the sand where bulls and bears make their last stands. I like to pick sides after I see who the winner was.