On Monday morning I discussed how the SPYs would probably hit resistance around $280 and find support around $270. Mondays high was $280, and the close on Tuesday was at $270. Yeah…I know….I was right once again…blah blah blah…yay me.
But now things aren’t as clear. Bottoms are always harder to identify than tops, On Tuesday I closed out the short position I entered on Monday and I am now I the sidelines. The market is oversold and there will probably some short-term support around $270 but the levels aren’t clear enough for me to take a position.
If we rally, once again I will look for resistance around $280. However, the more important level to watch is $260. This is where the recent lows were. There is support around this level because it is where the lows were earlier this year. If this level breaks to the downside, I think that it probably means that we will be going into a serious Bear market. My guess is that this is will happen, because interest rates have been artificially low for too long and now the ‘chickens are coming home to roost.’