Good Evening,
Spy was up .64% and I expect tomorrow to be a big day and I believe we will break out or break down from this trading range because we are getting CPI data, I’m not making any predictions on the CPI number, we are just following price action and letting the chart tell us what to do were still in a bull trend sitting right on top of critical resistance just above 442. And if we start breaking this previous high right above 443, we are likely going to squeeze towards that next target higher at 448. Now keep in mind these Bollinger bands are squeezing, so if we start to push too high, we will be outside the upper Bulger band, but another possible scenario is that we push back down towards the lower Bollinger band and hit this support trend line right around 432 or retest the previous low right around 431. So usually when you get a big data release, if you’re going to trade it your job is to look at the chart and look at the critical levels and then only trade with the market is giving you. There’s usually plenty of volatility to trade in either direction, so if you want to short wait for resistance. If you want to go long wait for support, we still must give the bulls the benefit of the doubt because this is still a bull trend until it’s not,, it’s still very difficult to take short trades for prolonged periods of time. So, if you are shorting, don’t forget to lock your profits at support and don’t be greedy. There have been a lot of great short trades in this market as long as you’re only taking them around resistance and then taking your profits as you get close to support. So I’m still viewing SPY as a trading range between 436 and 442 and the winner of this battle is going to be whichever range breaks first. The bulls win above 442 and the bears win below 436.
The NASDAQ 100 QQQ were up 0.49% today. And the Triple Qs are still holding this support at the 20 day moving average, which is that support at 365. And we are back above all the moving averages of the price action. So as I said with SPY. This is still a bull trend until it’s not. Again, the Bollinger Bands are squeezing. So even if we get up to critical resistance between 371 and 372. We’re also going to be at the upper Bollinger bands. Usually when you get a tight squeeze in the Bollinger Bands, you’re due for a very large move, but it’s not going to happen just in one simple day. It could take a few days to a week or more So in the triple Qs the trading range as 365 to 372 and whoever breaks that range first is likely going to win. The bears started taking over below 365 and then I’m looking for a trip down towards 355 to 357 and above 372. The bulls continue the bull trend, which means we’re likely heading to the 390s next.
The Dow Jones. We were up .9% today and the Dow did fill that gap. To the upside at 342 and it did open a gap to the downside which is now just below 340. So the gap filled to the upside and approaching resistance right around 344 to 346. You have to wonder whether or not the bulls are going to have the energy to continue to push or if this was just a gap fill before we continue lower to fill the gap to the downside. or test critical support between 336- 337. One thing to pay attention to in the Dow is it’s also possible this is just forming out some type of bull flag wedge which means we could reach the top of that wedge and then still get a pull back and fill that gap and then at later date get a break out to the upside or the downside and continue this trend. So this is likely going to continue to be a very choppy sideways market until we break out of these trading ranges and that’s just how you have to play it. So exercise plenty of patience and know these critical levels.
On the Russell 2000 IWM ETF, we were up 1.03% today and we did get the catalyst of the bullish breakout of resistance at 188. and from here, as long as we can hold above this breakout, even if we get a retest to make sure it is not just a false breakout, we are likely heading towards 195 next. keep in mind the small caps have gone nowhere this year, so it’s still possible the small caps go higher even at big tech is going lower. So there isn’t a perfect correlation here where you need to worry about being bullish in small caps. If you’re expecting the indices to go lower, it is possible small caps go higher while the rest of the indexes go lower. It doesn’t guarantee it will, but it is possible, and that’s why the small caps are barely up year to date, so you can now use your risk level at 188 because that’s the breakout or you could use the 20 day moving average, which is going to be right around 186 on the
VIX was down 1.33% today and the VIX is back inside the Bollinger Bands, and I still think there’s a good chance the VIX is just waiting for these Bollinger Bands to expand and with the CPI. Tomorrow we’re either going to see the VIX crushing back down towards 13 or trying to spike back up towards 18. It’s going to depend on how the price action moves and if we see fear develop in the market, I expect to see the VIX to move higher and I expect 18 and 20 by the middle to the end of this month.
On Bitcoin, we’re currently trading right around 30,500 and we’re still in the bull flag which is between 29,000 and then the resistance at 31,000. And even though it is a bull flag, we should wait for confirmation that it’s going to break to the upside and if we do get that bull break out above 31,000, the price target. It will be 35,000 notices. Bollinger Bands are extremely squeezed so the breakout of this range is going to be very volatile and should be a very impulsive move.
On Apple stock, we were down .28% today and Apple is continuing that breakdown below 190 and I did say below 190 I. can see us to go to 185 but we also have this support trendline right around 186. If we hold above this support trend line or go all the way down to 185, is anyone’s guess but expect to see support in this zone. Which means if you’re shorting Apple, you shouldn’t get overly greedy until we break support, which means you should be locking profits as we approach. Levels. We can get more bullish if we break the previous high around 194 and we still do have that valid price target up there above 197 if we can maintain a bull trend and not break down through these critical support levels.
So, jumping back over to the S&P 500… tomorrow should be a big day in either direction and. We are looking for a break of this trading range between 436 and 442 and we also do have this wedge that’s forming so we are going to get a very large move which is evident by the bollinger band squeezing and we’re about to break out of this range so we are about to see the next leg in this market as I always say the trend is your friend until the end and so the bulls do still have an advantage until the bears prove they can break down through critical support and then the bears will really come out in full force because of the fact that the bull trend will be a lot weaker. So, continue to follow the chart and let the price action do all the talking, always manage your risk and never risk to much and make sure the risk reward always favors profitability.
Cheers,
G. Allan Collins
