Listen Closely To The Market - It's Trying To Tell Us Something

THE WEEK

A whole new Market pattern has formed over the past week.  In last week’s Inside My Brain, I discussed the price action had hit a resistance level and was doing a pullback.  We didn’t know then if it was merely a resting area before resuming up or was a true reversal.  

Now we know.  The highs are getting lower and the lows are getting lower.  Even more interesting to me is the lows are dropping at a faster rate than the highs on each round.  Notice the angles of the green diagonal lines going down.  As the old Laugh In comedian, Arte Johnson, would say, “Interesting, very  interesting.”

LOOKING AHEAD

Notice on the SPY chart above I have drawn a support area at the $405.64 area.  I see two possible scenarios.  1) If the Price/Action bounces up off the support, we will see some chaotic sideways movements for a few weeks as the ship tries to find its course.  

2) If the price drops below that support with higher volume, we will have a strong down Market.  

Important:  A lot of you wrote to me about getting PUT TO as the price dropped.  On this Thursday’s webinar I will be doing a deep dive into this topic showing you ways to read when to step out of a trade and when it is OK to stay in.  It is simple once you understand what conditions the Market makers are looking for.  Remember, they are in this game to make money, too.

HOW AM I DOING?

I had another phenomenal week with a 12.3% gain for the week.  I am now ahead of the pace to double my trading account in our 10-week DATA class.  

This past weekend was my birthday!  I won’t tell you how old I am.  Just think, “Old as Dirt” and you got my age.

No Spring Chicken but a lot spring left in this old chick!