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Chart Courtesy of StockCharts.com
- $SPY has been inside a trading range since December 9th with $224 support and $227 resistance.
- $SPY remains in a long term uptrend.
- With VIX at 11.23 we are in a very low volatility market making it difficult to make money swing trading or trend trading. This is a day traders market. Historically volatility can’t get much lower. Volatility will likely return in coming weeks.
- The daily trading range remains very tight.
- 62.33 RSI is very close to an over bought reading.
- The MACD remains under a bearish cross but price has not trended down yet.
- Volatility could arise from the Trump inauguration day Friday, this rally after the election has already priced in a lot of Trump success. This could be a sell the news event.
- The best risk reward is currently with buying small dips and selling into strength.
- The DJIA 20,000 level remains to be a psychological level for profit taking and is acting as resistance for big cap stocks.
- I remain short the DJIA here due to the risk/reward favoring the short side and will be looking to cover and buy any deep dips back near the 30 RSI in coming weeks.