Hello Everyone,
Quick Comments: Following yesterday's big snap back rally and trend day, the market followed through yet again today. This follow through was also good for us as we have been long via the SPY Trend/Pullback system. At the close of the day one of the two Trend/Pullback systems closed out while the other one remains long. Thus we closed out our SPY call option, but remain long the SPY ETF portion to the system that remains long.
The market as it's been famous for has had a strong V rally the last couple days following a dramatic selloff on Friday - Monday. When the 20 and 50 day moving averages on the daily index charts have a strong positive slope higher, this tends to occur. Generally the market does not start larger sustained corrections unless the slope of the daily 50/20 MA's have flattened out.
Short term the market has come a long way, roughly 125 SPX points off of Monday's low in 2 days!!! The SPX is quite overbought short term and near resistance at 4360, with some negative divergence via the 15 min time frame on the MACD indicator, therefore this may be a logical place for some sort of shallow pullback.
enjoy the remainder of your evening,
Matt
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7/9: SPX daily DVT = 4260, SPX 2 day DVT = 4232, Weekly DVT = 4057
QQQ daily DVT = 352, 2 Day QQQ DVT = 344, Weekly QQQ DVT = 325.2
