By: Scott Redler
I attached a chart of the S&P that you will see a series of “lower highs”: 1217 then 1181 then 1131, and now we are approaching and area 1065-1080 which will be very tough for this market to get through at it’s first attempt. If you traded this bounce from the long side, this could be a spot to take some off. If you covered your shorts around 1040-1043- this could be a spot to try some.
What needs to be measured is how the market react during the next few sessions. This market needs to hold on to at least half of it’s gains. It would be even more constructive if market holds 2/3. The reason being is, you want to see commitment to the move. If there is none, then this was just a tradeable bounce. Watch key stocks and key sectors to see if they hold up and develop new patterns.
