With all the endless opinions about the stock market this weekend, I thought it would be prudent to list some facts at this inflection point.
Fact: The market is in an up trend.
Fact: We held the gap up all day Friday.
Fact: Many stocks are setting up at proper buy points out of bases.
Fact: SPY Bears that established short positions in the past two weeks have experienced some financial pain.
Fact: The market will appear overbought to swing traders but will look like a breakout to momentum traders.
Fact: Bull markets at all time highs have no resistance.
Fact: We have three levels of support, Fridays gap up open, the 10 day sma, and the 50 day sma. Did I mention we have no resistance?
Fact: At the initiation of new highs people tend to hold their positions because there is no selling pressure, everyone has a profit.
Fact: Bears in Bull markets do not make money until the end when the trend bends, bears can get broken before that happens.
Fact: If the market rolls over I will stop out with the loss of a key support level, I am not a perma bull, the price is my boss not my opinions.
Now do you want to play the long side or short side? If you want to go short the smart thing is to wait for a real two day confirmed rollover below support at the 50 day, at that could take awhile.
I have been long SPY now with a six figure position for over a week, so far, so good. I did not get shaken out Wednesday fortunately because price held above the 10 day sma. We opened at $161.14 and we closed at $161.36 on Friday with this gap and go situation. The first level for support is $161.00 at the gap up, the second level is at the 10 day sma at $158.70. Regardless of what this chart glitch is saying we did not fill the gap Friday we held above the gap opening level all day long. I am also going into Monday morning with 4 $GOOG $860 weekly call option contracts with this Friday expiration.