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SPY failure today at critical price level

On the 24th of April, SPY was charging higher (just like current market conditions) and opened with a gap (sound familiar) but immediately began selling off.  The high that day was $267.98.  Here we are 10 trading days later, and price pushed just above that level to $268.02 but then failed with a large drop of nearly $2 per share at one point in the afternoon.  The failure to close above the $267.98 level is likely not an accident, nor was getting such a selling reaction at this same level.  If you are bullish the markets, the market needs to close above $267.98 in order to generate any upward momentum (and yes, it could happen as soon as tomorrow).  If you are bearish the markets, watch out for a close above $267.98 as a sign that the bearish case is weakening.  There are other overhead resistance areas if we clear $267.98, but it is the first hurdle to finding a bullish climate to trade within.  Happy Trading out there!

  1. Michael
    Michael May 10, 2018

    Hi Dr J,

    I’ve re-entered the battle and now that 268 has been finally broached and heading to 272, what do you see as the next level of resistance?

    Mike

    • Dr. J
      Dr. J June 20, 2018

      Good job. We just reached one of the levels of resistance at 2800 (actually 2791) and backed off over the last few days. So, we managed to get the 100 S&P points I talked about in that post. Time to take some profits, or lock in some profits if you plan on being a trader around the position? I think so… If holding for the long haul, sell some covered calls in a shorter time frame just to generate some income from a decent stash of SPY.

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