05/18/2022
And I get it, money’s emotional…
…especially when you’re long and you get hit with the infamous “rug-pull”.
But some context is needed here… there’s a big difference between riding the trend and purposely trying to blast the share price.
And when you’re in a bear market, sometimes you have to grow fur.
Let’s look at the SPDR S&P 500 ETF (SPY):
We’re checking out both the daily and hourly again to pick and choose the shorter term positions amid the downtrend…
And if you’re long-biased, you’ll want to remember this phrase: “Nail and bail.”
Bullish positions are fleeting at the moment, but if you’re nimble, you can grab profits by the fistful when you need to…
Here’s where I think the SPY is headed for now until the next leg up.
I say “next leg”, but this is relative to the time frame you’re operating on… and the charts above are a good example.
More on this in a moment…
Starting with the daily, we’ve retraced to a clear support level around ~$395 and got a slingshot upward after breaking two standard deviations below in the channel (multi-colored dotted lines).
This left a small gap (white box), signaling a move to the upside.
I still expect the gap to be filled sooner than later and yesterday’s action in combination with today’s economic figures are likely to push the price downward.
When we fill that gap is another question…
On the hourly, I received a couple of short signals yesterday as the SPY approached the 200ema (green)… So I overnighted some May 18 2022 401 puts for a sort of “lotto” play.
(Risky and I don’t recommend doing this with size.)
Going back to what I mentioned about why time frames are so important, take a look at the lower indicators on each chart.
They’re moving in completely opposite directions.
With this type of volatility — in a bear market — you have to know what your time frame is…
Keep moving,
(Disclosure: I am short SPY.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
