Today things finally felt normal again with our ole girl SPY. While I did note volume was unbelievably low today again… we finally had some big moves. I actually can not believe we finished down 2.12%! I did say we had potential to see -2% and finish near 437.4 yesterday in my post but i surely didnt think we would actually break lower than 2%.
For those of you who read my post yesterday I presented 3 very real scenarios that could play out today and into next week. I mentioned I favored scenario 3 which was that 448 was the top. Yesterday I mentioned how much selling pressure and lack of upward momentum we had yesterday when it attempted to breakout. To me that was a massive red flag. Well over night we did see a pretty big sell off that never really recovered. I was not up this morning to watch pre market or opening bell so cant speak too much on that. But here is what I noted once I woke up around 1230…
As you can see from the time Market opened until we closed today we never one time say a candle completely close above the 15 min 8 EMA. We did see a few wics 2 candle bodies break that. (actually i take that back 1230 candle finished ON the 8 EMA but took the shape of a doji). That to me showed heavy sell pressure all day long. The 8 EMA loves to be support or resistance depending on bull or bear. For those of you who have joined my live trading days you know I always preach confirmation before we make a move. Today would have easily been a day anyone could have expected a bullish turn around.
We also NEVER fight the trend. after/ pre market were clearly red. We can out red, we never even broke a candle above the 8 EMA when we opened and the 2nd candle was a massive dip. Those are signs we need to watch for and we need to not fight the trend. For my strategy today would have bene a harder one to buy in until middle of the day when i woke up anyways because we were already below the 8 EMA and riding lower bollinger band which is not a good time to get in as thats often the current bottom. Its better to wait for the bounce like we saw and a good entry.
Around 1pm is when I finally bought in for an intraday play and a long position.
Today finish is extremely bearish and heres why… We failed to once again make it back to the major downward resistance line sitting near 454. In addition we broke the major support line of the daily 200 EMA near 439.97 and closed WELL below it. Those are not bullish signs at all. We MAY see a small relief bounce tomorrow but for the next short period of time we have some very bearish territory to approach.
Support- 463.9 –> 434.17 –> 432.18 –> 429.9 –> 428.3 –> 427.5
Resistance- 438.5 –> 439.8 (200 EMA daily) –> 440.7 –> 441.7 –> 442.8 –> 443.5 (weekly downwards resistance line) –> 444.7 –> 445.8
We are currently in a downards channel as you can see on the chart i posted above. Upper resistance line puts us staying below the 439.8 (daily 200 ema) resistance line and keeps us above the 432.2 support line over night. If we break above 439.8 over night we may see a small relief rally tomorrow. However, if we stay in this channel over night I would be surprised not to see more red tomorrow.
Long term over the next week or two that we will retest 420. I see far more downside than upside.
Another thing I am looking at and watching for why we are going to see more red is Crypt0… They are down 7% and continuing to dip and getting ready to break some major supports from their small pump.
Last night as i had called out when we stalled out at 448 it was a good time to buy a high risk put for today.
I had bought 1 small $160 2/18 444P- closed for 145% when i woke up
I opened intraday 2/18 440P- closed 33%
I opened a 3/4 440P- holding over night and into next week (up 28%)
I opened a small high risk 2/18 438P for tomorrow- up 3% at close
10% challenge update-
Since friday I am averaging 8%. and i have tripled my starting basis. Like i mentioned a while ago in my 10% challenge. We do not need 100-150% gainers everyday. We just need to average 10-20% consistently. Thats all it takes. Yes of course some days we are going to get some large gains but the trick is to not risk 10-20% gains hoping for a 50%. We are not here to get rich over night. We are here to make calculated trades that give us consistent gains that OVER TIME add to large gains.
Submitted February 17, 2022 at 10:41PM by DaddyDersch
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