≈ Maybe. ≈
Traders,
My beta weighting message will have to wait until Monday. Yesterday’s market rally demands some attention. In light of the market strength, particularly after such a compelling bullish reversal candle as Wednesday’s, some of you may be wondering if that was the bottom.
The unsatisfying yet correct answer is we don’t know yet. There simply isn’t enough evidence. Trend reversals are confirmed when you break horizontal resistance zones and major moving averages. Yesterday did neither. In fact, with the late-day rollover, SPY didn’t even close above the 20-day moving average.
What’s more, the volume was negligible. The 72 million shares traded on SPY marked the lowest participation in eight sessions. As I said in my Wednesday message, rallies are suspect.
So what would make me a believer that the bottom was in?
For starters, SPY needs to close above the 50-day moving average (currently at $442.86). Then, we need to push above the old resistance pivot at $445. At that point, the daily downtrend is over.
Give me more, SPY. Give me more.
#TeamTackle
Chart of the Day
SPY Resistance
With Thursday’s late-day selloff, SPY ended with a long upper shadow. It wasn’t the strong close bulls were gunning for, but I suppose it could have been worse. Here’s to hoping we see some upside follow-through and more conviction.
Video of the day
Focus on Fundamentals: Return on Net Tangible Assets (RONTA) Explained
In this Fundamental Focus clip from Thursday’s Halftime Report Coach Greg explains what Return on Net Tangible Assets is and how traders and investors can use this important fundamental concept.
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