Coach Gino recognizes a Critical pattern every trader should know.
This is a weekly candle chart of the S&P 500 –

Notice that the S&P 500 hit support on long term weekly support and is now bouncing up.
Also, quick note same with the Dow Jones Industrial and Nasdaq indexes. The Russell 2000 broke below the longer term weekly downtrend.
So the markets in whole are looking like its a buy on the dip again and lets rally to new highs.
But WAIT!
Notice the next chart on the daily candle. This is a pattern you have to always lookout for. Its a possible Kiss Of Death which could equal a quick fast bearish drop. Meaning When a support level is broken that is a strong support like a double bottom or a follow through break of support from a double top pattern that looks like a big “M”, the stock will bounce on the next support (like in this case the longer term trend line) and rally back to that previous support which is now considered resistance. Its what we term “support is now resistance”. But when the resistance is a high base like we are looking at or an “M” double top pattern kind of also what we see here it looks like this

Decision point here for the markets. If S&P 500 closes above the resistance and holds than we can possibly run higher, BUT here is the critical point, if we drop from here and look at the volume if we do, and if the volume is higher than the previous days as it rallied up, than lookout below.
So the Kiss of Death is when the candles run up to previous support which is now strong resistance, kisses that level briefly, says goodbye then shoots down quickly to the grave. So we are keeping our eyes on the s&p 1955 to 1960 level this week. If the K.O.D. occurs then great! there is a lot of money to be made on a big move down. Already eyeing some Bearcall spreads for that, and if it starts hitting above 1985, then bullputs under 1900 back in play. Check back frequently to our Scouting report for screeners and trades we put on weekly. Also Check out the Trading Room for great training on how to work strategies with options to increase your Reward over risk ratio.

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