You Adjust to the Market...Not the Other Way Around!

Long positions are drying up as S&P sits on key support.

Technical Edge — 

• NYSE Breadth: 50% Upside Volume 

• NASDAQ Breadth: 54% Upside Volume

• VIX: ~$28

Game Plan: S&P 500, Nasdaq, Oil, Gold

“When things speed up, you need to slow down.” 

It’s something a very good trader would say to me often when I was still trying to find my “sea legs” out in the market. At first, I never understood it. How can I slow down when the market’s speeding up? I have to go faster!!

But over time I’ve come to appreciate the simplicity of this advice. 

The goal here is to keep things simple and defined when market volatility picks up. That’s where the prep works — i.e. this newsletter — really pays dividends. We have a plan and if it plays out, we know exactly what to do. If it doesn’t, we sit and wait for the next opportunity. 

Instead of making 10 trades in a day, cut down to 5 (or even less). Instead of trying to maintain 10 open positions, just working 1-3. None is okay too. 

For ex: Is the S&P above or below a key level?

• Above = longs are still okay. 

• Below = No longs | cash is fine | seek shorts at/near active resistance. 

S&P 500 — ES 

The ES is quickly approaching a very key zone: 3740. 

The last two weeks’ lows sit at 3741.25 and 3744. This is a must hold area for the ES. If it does, bulls need the S&P to reclaim yesterday’s low at 3752 and the 61.8% retracement at ~3758. 

If it can do that, we could see a push to 3800 today. 3800 to 3825 is a tough area of resistance right now. 

If the ES breaks 3740 and can’t reclaim it, this level could become resistance. In that case, we have 3705 in play and risk retesting the lows. 

S&P 500 — SPY