Here we go coming up on the test of the 50 day simply moving average in the market measuring SPY ETF. Bottom fishers and swing traders are waiting to buy at this level that has held up well for the whole year. Many long term trend followers are waiting to sell with a confirmation of a close at some percentage under this line. The strong uptrend will be tested tomorrow. I expect a nice pop upwards at this line on the first attempt to break it as buyers rush in. A close above will be the first sign that the up trend resumes, a close below will be the first sign that we could accelerate the rollover. The bulls and bears will slug it out over this line in the sand of $160.48.We have a long term up trend coming to war against the short term down trend and the price action at the 50 day will choose the winner. 

I am already long with SPY calls today with a stop loss at a close below the 50 day SMA. I went long due to the extension of price so far below the 5 day and 10 day moving averages and the fact that the 5 month support held so far in the longer term up trend. A true reversal would likely have a long shadow on the candlestick as it reverses. The 5 day ema is the first line of resistance the 10 day the 2nd line of resistance with the 50 day as the long term support.

Let the games begin, it is now all about these key levels and what happens next. It is possible to ride a trend for a month if our entry is good enough at this turning point, it is possible that QE infinity brings us back to all time highs in a new secular bull market or the fundamentals take us to the 200 day. Our job is to ride the trend where ever it takes us.