By: Scott Redler
As the market maneuvers in a semi-chaotic fashion this year, our mantra has been to trade it. So, when we came in today, we pointed out the ascending channel that typically gets resolved to the downside (descending channels typically resolve to the upside). With the action of the market’s leaders trading below Friday’s lows–like AAPL, GS, etc.– we expected a little selling. Sure enough, this ascending channel has broken to the downside. This move should help relieve the overbought condition in the market and create another BUYING opportunity.
The compelling zone, in my opinion, that must hold is the 1,118-1,128 area on the S&P. Once we hit that spot, we will review the landscape in order to anticipate the next move and be ready to get involved when no one else will want to.
