Working Off Oversold Conditions

**These are my thoughts on the SPY ETF in my Daily Trade Ideas which includes many, many more charts and setups. Subscribe to my nightly Daily Trade Ideas on the right to see the rest of this letter.**

“A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them.”  John C. Maxwell

Friday saw another gap, but this time it was a strong gap higher which saw the strength continue into the close.

It’s a tough market to play when gaps are prevalent again so I’m looking to get short off resistance areas most likely later in the week ahead, if that’s what the market gives me.

SPY February 16, 2016SPY back above 185 is great to see and now we look to move past 187.50 with 190 resistance above.

It’s tough to hold overnight now with us seeing more large gaps overnight these days again, so I’m all cash for now and really, we shouldn’t see this move go above 190 since it’s likely just working off the oversold conditions we just saw.

This market looks to have more to go on the downside and I’m swing trading the waves.

That said, we may have a double bottom in place now.

So, things do remain confusing but the weekly and monthly charts are pointing to more downside, so that fact is weighing most heavily on my market views at this time.

Enjoy your long weekend.

Warren

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