This week the market sold off several times during early trading, only to claw its way back in the afternoon. It was like the bulls were playing a "goal line defense," denying the bears any meaningful progress.
Monday saw the S&P 500 open at 1,497, following the prior Friday (Oct. 19th)'s sell-off. It clawed back up to 1,506.
On Tuesday we got up to 1,519, then sold off early on Wednesday only to reverse and close back at 1,515, just 4 points shy of the prior close. Early selling was again present on Thursday, but the market again reversed and closed at 1,514, down just one point.
Friday saw us finally push higher, closing at 1,535. So, we saw some upside by week's end and can head into the weekend on a positive note.
The "line in the sand" was apparently drawn at 1,500 on the SPX this week. We dipped below that level during intra-day trading, but we consistently closed above it. Friday saw the SPX break the bearish trend line but volume was not resounding, so I will be interested to see whether we follow through next week.
The market is trying to determine whether it wants to continue its bullish trend, or whether earnings growth will no longer justify higher equity prices. We all know that it is significantly easier to make money in the market when we trade in the same direction as the trend. The trick is finding the trend!
The above like will take you to a video presentation by Brad Stafford from MarketClub. In this video, Brad shares some techniques he and Adam Hewison use to find trends and trade them. There is no registration required to view this video.
Trade well!
Christopher Smith
TheOptionClub.com
Discover the stock options strategies favored by professional traders in our FREE options trading mini-course!
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