Given that investors and market strategists are literally praying that stocks can hold on to important psychological support points and start to bounce, it makes you wonder if this is the point where it's actually going to make one more push on the downside.
In case it actually tries to go up, this is the set up. It's a test of the 20-day low, the so-called StreetSmarts Turtle Soup buy setup on the daily $INDU and $SPX charts. The way they do it is to buy if price heads back up through the March 15 swing low on the DIA, while the SPY has to go back up through the March 16 swing low. Their initial stop loss will be placed just under Monday's low. This is a swing trade.
Personally, since yesterday was an inside day and we know that market players are going to try for breakout conditions that leads to what they call a "trend day", I would look to enter on the buy side if Tuesday's high is broken, and use the low of the day whatever it happens to be at the time that the trade is triggered as the initial stop loss, mainly because we have just seen too many of these "breakout" days whipsawed. We would only take the buy home if it can close above the March 15/16 swing lows.
Since it's an inside day, and we know that the market usually doesn't answer prayers, we can also sell short on break of Tuesday's low, and use the day's high, whatever it happens to be at the time the trade is triggered as the initial stop loss, in case it makes one more push on the downside. We would probably look to take our money if the day ends really badly, but if it does, there is always the possibility that they all freak out and we see selling until the $SPX hit the 200-day moving average below as panic grips the market.
04.03.24 09:14 #