Bounce in a downtrend- DON'T buy up here
In my eyes, there are virtually zero reasons to be going long up here. All we've done to this point is bounce in a downtrend, virtually repeating what happened from March 29 to June 16(marked up the chart to help you guys see the similarities in the moves down). Soon, we're going to meet resistance at SPY $390. Is it possible we go above it? Sure, I can't discount the possibility. That being said, I think it is an incredibly safe bet shorting there: the risk:reward will be about as good as it gets SHORT in the stock market, IMO. As I've been stressing, there is no reason to believe the stock market has put in a bottom judging off the charts- no capitulation, we're still very high up all things considered, have yet to see serious accumulation across the board, etc. This is only a bounce in a downtrend, and I see no reasons to believe we won't go lower. I've exited all my longs, but I still think we make it to 390- I'm just not betting on it, and I think the risk:reward up here long is depleted and laughable. I'm now waiting on us to reach 390, or for the eye test to suggest we're topping out and that it is time to go short. I'll make sure to post shorts as I see them. I can only stress that you guys protect your capital, and definitely don't go long at or around these levels. For those of you that are less aggressive than I, I would suggest looking into hedging your portfolio with shorts, or selling longs into the rally to decrease long exposure.
Best of luck all!
Best of luck all!
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.