SPY was down 1.12% closing right on top of critical support at $414. We did get that rejection from critical resistance at $420 This pull back was expected because we were getting to far above the the upper Bollinger Band as we hit resistance which was a great opportunity For bulls to take profits and bears to take an opportunity to go short. We sell short at resistance and buy back at support. We are now back at critical Support. I mentioned yesterday that we would need to retest the break out level. Now that we have that pull back, this is likely where bulls will come in and buy because we do have the bull trend with higher highs and higher lows.The bulls need to buy this pullback. If they can hold that critical support zone between $412 and $414 and we do bounce from the support zone, remember we are breaking out above the February highs If we get over $417 this would be a successful retest if we fill the gaps above at our price targets $421 and $425 it’s likely we hit the August highs at SPY $430 but if we gap down or just drift lower then we will most likely break through support and we’re instantly saying we are losing the bull trend and we will be looking for the lower price targets at the gap fill’s at $407 and just below $402 and possibly the gap fill at $396. Bottom line keep it simple we need to wait for the price action confirmation and trade accordingly. Thats what We do here, we let the chart do all the talking.
The NASDAQ 100 Triple QQQ’s were down 1.27% today and we did exactly what I was expecting, which was the pull back to retest the breakout at $333. Remember just like SPY, the QQQ were over-extended above the upper Bollinger band as we reached my critical resistance zone between $337 and $339. Getting over-extended as you hit resistance usually means you are likely due for a retest at the breakout, and the break out was the level at $333, so the bulls are set up here if they have enough momentum it looks like a text book pattern of a breakout into a retest. On the retest you can either bounce off the retest level and confirm the bull trend to higher prices, or you are gonna slice right down through it and continue to lower support levels which is around $327, There is a good chance with the rising 20 Day Moving Average, that we could still go lower but we need price action confirmation which will be the breakdown through the support at $333, if we do bounce from here and break the previous highs than we are most likely going all the way into the $340’s but we need price action to confirm the bounce. Let the price action do all the talking and follow price from that level.
The Dow Jones Industrials were down .69% and the dow jones lost critical support at $332 which means there is a good chance we are coming down to fill the gap at $329 below the gap fill we have support at the 200 Day moving average of and there is still a gap to fill at $322. We have lower highs and lower lows breaking through support with gaps to fill to the downside so we are not getting bullish until we can clear resistance at $336.
TSLA was down 1.65% today. TSLA was getting over extended and Needed to cool off as well. TSLA sold off on very high volume and This could be a pivot Which is going to put in a lower high before we continue lower, however there is a small chance we could bounce to $197 and the 200 day moving average at $200. As long as we are above $183 you can stay bullish. If we Break through $183 to the downside then your instantly getting a lot more risk off for the retest below between $173 and $175. we had what looked like a short term bull trend but they are in a long term downtrend.
G. Allan Collins