I’ve been busy with graduate work the past few weeks and haven’t been able to blog that much, but I needed to get a point across tonight after today’s market signals. We’re clearly rolling over here, with AAPL, GOOG, and PCLN leading the way down. I find it really interesting how AAPL has gone insane to the upside, and now that it’s heading lower people don’t want to believe the run is over. Well after today’s high volume sell off, there’s no doubt that lower prices are ahead. Now there could be a bounce, of course, however I’d be shocked if we turn and head bullish after the action we saw today. I bought some SPY puts this morning which are currently sitting at +32% ROI. Talk about quick profits…Now that being said, I sadly haven’t had a good start to the year due to the fact that I didn’t get into this market until late Feb, when most of the upside move had already happened.
However we have a possible opportunity here to make a lot of money if this market rolls over. Be patient if you aren’t comfortable shorting or buying puts. If you are, get ready and watch for some more downward pressure that will send us MUCH lower if it comes. See the chart below of SPY (The S&P 500 ETF). We’re sitting right now on the 50 EMA (and a trendline support, green arrow). If we break through bearish, then the next target is $136, then around $134, confluence of the 38.2% Fibonacci retracement AND a traditional support line. After that another confluence of the 61.8% Fib and support around $130. All the targets are in blue.
Also look at the increasing volume, it adds credence to this bearish move…the big boys are dumping stock. Time to get out (stay in cash), or buy puts/short and make profit on the way down. Either way is smart. NOT trading is a completely VALID and necessary strategy. Don’t trade all the time, you’ll over trade and lose big time. Wait out these corrections and keep watching since the market will turn on a dime and leave you behind while you watch stocks begin a new uptrend (like what happened to me in Jan/Feb). Good luck out there.
SPY. Bearish Targets in Blue
