- The market did finally bounce intra-day near the 30 RSI Thursday it was quick and violent and sent shorts covering. This indicated we were still in a long term up trend and buy the dip was still alive.
- Thursday also provide a strong reversal candle showing selling was exhausted and buyers were back in charge.
- Friday provided a bullish follow through day confirming the bounce.
- Resistance held at the 50 day sma. A break and close above the 50 day will be an entry signal for me and an indicator that the up trend may continue back to all time highs.
- I will also be watching the 50 RSI as another potential resistance level that price needs to get above to signal a new momentum signal up to new all time highs.
- If we reverse at the 50 day on resistance the 30 RSI and the 150 day sma are high probability support levels and possible buy points.
- We are still only looking at two days up after a ten day red waterfall so caution is still warranted as we wait for momentum to come back.
- MACD still has a huge bearish reading and that will take some time to repair and signal a bullish crossover.
- The volume in $SPY was so similiar on the Tuesday and Wednesday down days versus the Thursday and Friday up days to really show why volume means little to nothing when trading $SPY.
- What I am looking for: A momentum buy with a close above the 50 day/50 RSI or a buy the dip at the 30 RSI or 150 day sma.