$SPY : High Probability Buy Levels



The profitable trading system in the stock market for the past two years has been to but the dip. The question is what level presents the best probabilities for a dip buying bounce?

We currently have three key support levels converging:

  1. The 50 day moving average at $200.22.
  2. The $200 price century mark is the gap up support level from late October.
  3. The 30 RSI is near those areas.

Any of those levels could be a potential bounce zone.

If those levels are lost intra-day then a bounce by end of day could bring the markets back over those levels by close.

My ideal trade would be a loss of the 50 day and $200 and drop to an RSI near 30 around $198 to allow me to enter with a great risk/reward ratio.

A momentum trade would be a loss of the 50 day then entering long with a close back over the 50 day.

Trade at your own risk, bounces can be tricky and markets tend to fall farther than we suspect it will. A good trade is one where you have a great risk/reward ratio with your stop loss versus your profit target.