Bucking the Trend? – Chris Hood

 

Date: 7/29/2022
Author: Chris Hood

 

 


It seems like the bulls have really come to play in the market.

As I write this, we’ve seen SPY bounce off the 370 support level up to 406.07 in the past couple of weeks.

And there may be more upside in the short term.

With AAPL and AMZN showing some massive afterhours, there may some carryover in the momentum tomorrow.

A gap-up certainly would be nice.

I told you it’s difficult to predict what stocks will do after earnings, and major moves in the SPY components mean the index will run up with it.

The big question is, where do we go from here?

Could this be the daily reversal that begins to repair the weekly and monthly charts?

I’m not holding my breath. Both still look terrible, and it will take more than a bit of a bull run in an otherwise bearish market to change the tide.


Social media and chatrooms have changed the way a lot of stocks move… crypto too.
Briefly, let’s talk about how “pumps” work…

 


For those interested in day trading, I suggest you tune into the Alpha Hunters subscription-based planning sessions.

I haven’t been able to send out many long-term trades because I’ve been playing primarily on the 12-minute chart.

The uncertainty in the market right now is just too high for long-term predictions to carry much weight. It’s like planning an outdoor party 2 months from now based on a weather forecast.

We all know how accurate those are.

It might go off amazingly well, but it could easily turn into a rain-drenched nightmare.

The charts and my indicators tell me that SPY has some upside room to run before we hit a massive wall of resistance between 414.00 and 427.00.

If SPY can’t break through that, there could be a lot more downside to come. Or at least we’ll drop back to around the 404.00 level.

Given the weekly and monthly charts, we will likely see a significant slide.

Of course, we could also go back into a seemingly-endless sideways pattern of chop, something that can wreak havoc on the value of long-dated options.

So we really have a mixed bag in the market.

My suggestion is to keep your trades small and quick. Day trade if you can.

If you must trade directionally, look at the clean energy sector, which seems to be getting some love.

Should other tickers follow the trajectory of ENPH, FSLR, and XEL, there could be some great money to be made there. And if you would rather not deal with earnings, consider the ETFs ICLN or TAN.

Given the geopolitical issues surrounding oil now, yesterday’s gap-ups make sense.

I’ll leave the speculation about the exact causes of that to other people.

However, the tickers don’t move unless major investors are willing to buy in heavily. They almost always know more than us retail traders.

So keep your eyes on the charts.

Don’t assume SPY is healthy based on one green week, but if you trade it,n hone in on the short time frames. And do keep your eye on the clean energy sector.

Cheers,
Chris Hood


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