Two weeks ago I sent a warning to be careful shorting short-term above 392.34 and sent the following message:
For next week here’s what I will be watching:
$SPY
Shorts only below 392.34. I think trying to short above this level may result in premium crush, unless you are sizing into a big short that is for several weeks or months out. Optimal spot for shorts (shorter term) would be 403.75-406.61 area
We have not retested that level since then and have been consolidating in a rising wedge. Last week I warned that the breakout from the wedge seemed premature considering so many big tickers were at major resistance lines, and we retested and retraced slightly. Ultimately we closed the week just under the line for the wedge, and now we are headed into this new week like this:
SPY 0.00%↑ retested the 8ema and held, however fell short of the breakout so it was a breakout - retest - fail - retest. Although CPI is coming up this week, I don’t think it will be enough of a catalyst to move markets either way as markets have basically become completely complacent regardless of data / news / circumstances. “Sell in May and go away” is something to consider as markets could theoretically continue to chop for the entire month of April, or head slightly higher before a large wave down.
While some have pointed out an “inverted h&s” on SPY, I don’t agree but I can see a c&h which has a measured move of 420 on SPY. We need to remember there is an unfilled gap above at 421.22 back from August. There is also an unfilled gap below at 396.49.
Last 2 weeks we made some good calls. For example, AMD 0.00%↑ where we suggested a short below 100 to target 89.03:
We made it as low as 90.62 so far, from that $100 resistance line. Keep in mind the potential 80/100/120 here as in the notes.
We also made a good short call on NFLX 0.00%↑
We got a short from 345 to 332.63 before a quick bounce. Pattern remains in tact for the following week.
And then of course we got a delicious short on TSLA 0.00%↑ from 210 to 180
For next week i’ll be watching the following levels:
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