SPY was up .46% and intraday we were starting to break down below the support level at $411 and we did look like we were going to fill the gap at $407 but intraday we found buyers at Spy $409 and closed back over $411 and below the resistance at $414 we have the PPI so we could finally get a break out or breakdown. It’s possible we continue sideways as we have been since the first week of April. We suggest you continue to buy at support snd selling at resistance because there is no clear trend, there really isn’t any reason to hold onto any position if your day trading.There is tremendous resistance on SPY between $414 and $417 because the bears are finding it fairly easy to short at these critical resistance levels.If we break out of this range to the upside we can easily trade up to $420, $425 and then $430 If your a bear only short at resistance and if we break out we are likely going higher to $421 to $427. If your a bull get bearish below $411 for the gap fill at $407 and thenSupport at $404. Get bullish above $417 because we will have a bullish trend continuing and if we break down below $404 we are heading into a bear trend.
The QQQ was up 1.09% and we found support above $421 we are still seeing higher lows and higher highs. f you look at Price action we still have the double bottom price target of $327. The risk reward ratio is getting a lot better for the bears as we approach critical resistance levels. If we do break through $327 there is also a critical resistance level which is the August highs at $333. Be very defense as bulls as we approach key resistance. Stay bullish as long as we continue higher but if break down below $321 instantly get bearish. So manage risk at that level and if we break through it to the downside look for the gap fill at $315. This range will break because as I have pointed out there are gaps above and gaps below.
G. Allan Collins