S&P 500 Market Outlook: Bearish & Overextended
Markets have pulled back violently and resolved its negative divergence on coronavirus fears. In this type of market, we do not want to chase shorts or try to catch a falling knife. Our initial thoughts are to look for long opportunities from this selloff but prefer to wait for stability before seeking long exposure. On a weekly chart, SPY remains bullish and this pullback puts it back into a better position for a continuation higher. On the daily chart, we see multiple positive divergences that may provide support for a bounce higher. $320 is the new resistance level target to the upside with $302 as support.
We have reduced almost all of our long exposure as markets become overextended and seek to add exposure over the next few days. View DailyPlay Trades
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