I trust everyone had a successful trading day yesterday.. SPY experienced a slight dip of 0.15% today, closing at 450.35. We witnessed some notable price volatility throughout the day. From a technical perspective, we initially surpassed yesterday’s high, experienced a significant reversal, and ultimately concluded with SPY closing near its daily low. It’s worth noting that despite the recent market uptrend on relatively low trading volume over the past week, there was a lack of sustained bullish momentum. Traders appeared to become more active later in the day as they recognized the approach of the Friday before Labor Day weekend and the significance of tomorrow, which marks the start of September—a historically challenging month for stock investors.
Today’s trading activity is expected to be characterized by low volume due to the impending holiday weekend, making the market more unpredictable. It’s crucial to monitor SPY’s performance around the 448 level. If SPY remains above this level, it suggests a bullish sentiment, potentially leading to a gap fill around 455. Furthermore, breaking through this gap could set a new price target at 460. Conversely, if SPY falls below 448, it signals increased risk, with support levels at 430, 444, and 442. If these support levels are breached, it’s highly likely we’ll see a retreat to at least 430.
As for the Qs, they posted a 0.30% gain, closing at 377.19. Keep a close eye on QQQ’s performance around the 375 mark. Staying above 375 implies a continued short squeeze potential, while dropping below 375 suggests a higher level of risk, potentially testing support levels between 366 and 370. A breakdown below these levels could lead to a retest of the lower support trend line and the previous low, with a potential double bottom formation around 355. Should that level fail to hold, we may target 347, followed by a gap fill at 333.
Current Short Positions:
8/31/23 Short 500 Shares NVDA at $257.10
8/31/23 Short 703 Shares TSLA at $497.20
To recap, the sentiment is bullish above 375 for QQQ, but a move below 375 signifies heightened risk.
Wishing you all a fantastic Labor Day weekend.
G. Allan Collins
G. Allan Collins