Remember to "Pay Yourself" Along the Way

Technical Edge — 

• NYSE Breadth: 60% Upside Volume

• Advance/Decline: 53% Advance 

• VIX: ~$20.15

The market did a great job rallying off support on Friday. Coming into Monday, we’re back under pressure again though. 

We keep trimming into the upside rallies and raising our stops to B/E or better. It’s imperative to take profits along the way and “pay ourselves” for the risks taken. 

Don’t be in a rush to make a million trades on Monday morning. Let the action come to you. I always feel much better starting the week off on a strong note, but it can create mental stress when we force trades and end up “in the hole” early in the week, sparking revenge trading reactions.

Friday’s action was good. Now let’s see if we can take another layer of longs and see if we get a decent R/R on any new setups.

S&P 500 — ES 

On Friday, we had a huge reaction off the 4006 area and the 10-day moving average. However, bulls would ideally like to see the ES hold above the 4050 area and the 200-day moving average. 

That’s been a key level of multi-week highs, as well as the 200-day moving average. 

If the ES breaks below this area, it opens the door back down to Friday’s low and the 10-day. If we break 3990, then the 3940 to 3950 zone is back in play. 

On the upside, keep an eye on 4075. Above it puts 4085, then 4110 in play. 

SPY — Daily