"I'm not at all sure what I am looking at!"
2 Day, 15 m. - July 28 - Hind sight is 20/20. There was a nice trade set up today on the SPY. Following the CCI as a "lead" indicator combined with a "double bottom" on the candles should have triggered a Call play to the upside. A .75 gain or more could have been captured. The MACD was making a turn to the upside as well. The primary trend right now is bullish. The market being overbought mitigates against taking long trades of any size as there is definite risk to the downside. This was an intraday play and not a swing trade over several days. The number one thing to look at is the Trend. A trade against the Trend is far more risky than a trade with the Trend. The second thing to consider is the Market Condition (Overbought vs. Oversold). Then timing the entry using Price Action, Moving Averages, CCI, and Candle Sticks. Other indicators may be used but we have found that it is best to limit the number of indicators as too many will produce "paralysis by over analysis."
30 Day, 2 Hour - July 28 - Overextended and overbought market at this time. This increases the risk of a sudden reversal and lends itself best to looking for entries on a pull back. New long positions at this level are discouraged. Resistance at 96 was broken to the upside. 96 is the new level of Support. "Old Resistance becomes New Support."
3 Month, Daily - July 28 - The market run to the upside has been a huge disappointment to the Bears. Technical Analysis has classically called for a "correction." This has not only failed to develop but the market has charged forward into new territory. 96 is the new Line in the Sand serving as Support. A break down below that level would be decidedly Bearish. Today's session finished on a Bull Note but without clear signals as to direction from here.
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