Here’s How A Reversal Can Develop
When the market starts acting suspicious,
I tend to focus on the ETFs. In today’s trade many of our favorite high
flyers were called back to the tarmac, while the broader market continued to
push higher during the first hour of trade. Action like this definitely raises a
warning flag of sorts. This is especially true when its taking place on
bullish news, like that which the market embraced in pre-market trade. After
climbing a wall of worry the past two weeks, today’s news was just too good to
be true, and guess what, if you listened to it, instead of the setups happening
on the charts, it definitely was.
11:03:23
Intraday
Setup Alert
The Diamonds (DIA)
and S&P 500 (SPY)
are forming potential 1,2,3 reversal setups. The index proxies are up
between 1 and 1.5% as they establish fresh relative highs in today’s trade. This
action also has the ETFs testing intraday volatility band resistance levels
between the 1.5 and 2 Vol Bands.
A nice setup, and a little common sense
can all add up to a pretty decent trade, and have you thinking, “It’s too
easy,” as well.