Buyer's Remorse
This environment is just trash.
Buyers could not hold SPY over $400 wiping out the gains of last Friday. What else is new? On the flip side, sellers can’t get much of anything going either.
On a larger scale, buyers still very much have control. We have two higher highs and two higher lows (you could make out three if you wanted) so provided you are patient and managing risk, you simply accept profits won’t last and allow the market to work itself out. That’s about the best you can do. Gone are the easy profits of the 2010’s.
To a smaller degree, we are building a downtrend off the Feb 2 SH but there’s nothing to signal to me yet this is a new downtrend; it simply looks like a nasty correction. I would have much preferred a push to $420 to give buyers more confidence but $418 was all we got and that doesn’t seem to have done the trick; at least, for now.
We find SPY back in this ghost channel and note where the pivot high was from Monday. For whatever reason that channel is still indicative of inflection points and we’ll see if that holds true today; traders may want to take long shots with small sizing in the $396 area, should we get that low. If you bought at the close yesterday, can’t blame you as SPY was trying to establish support between $398 and $399.
For me, I’m comfortable with new longs today provided we stay over $396. I would love to see a small gap-down open followed by a fill. Otherwise, I’m content letting everyone else hash this out and letting it unfold for the next setup. I see no reason tossing my money in the air for everyone in this type of environment.
You don’t always gain experience by the trades you make. More often it comes by the trades you don’t.