Market Update June 24th

Going into the day today as a firm we had identified a few levels in the SPY where we were looking to get involved.  The first level we had looked at was the 108.50 level, which had a few reason why it was significant.  The first reason was that it was the lows from the previous day, which is always a significant level.  The other reason was that it was around a Fibonacci level which was 108.80.  Now I don’t put much credence into the Fib numbers but I do look at them for the markets.  If one of the numbers may be coming into play during the day I want to be aware of it and I watch to see if volume comes in at that level.  That was the case yesterday at 108.50. 

We opened up at 108.69 and immediately traded below this level.  Many of the people in our firm got short Western Digital(WDC) and Seagate(STX) around their opening range.  Many people today got paid off in a big way on the open because they had a plan for what was unfolding in the market.  The SPY traded down to 108 bounced and then made a perfect swing high around 10:30 which many traders got paid off on, except myself who got caught in JP Morgan(JPM) which rallied a point of the lows during this time. 

Right now we are trading in a range on the SPY between 108.30 and 107.70.  As long as we stay below 108.50 I am biased to the short side in this market.  The SPY looks to me like in the next few days we should be testing the lows at 104.40 but as usual the key is trading what the market gives us.  Always have a plan for the other side of the market so if that plays out you won’t just be jumping into  a position.  Look for stocks that are showing relative strength and is the market bounces above 108.50 those should be the first stocks you look at to go long.  Best of luck for the rest of the day. 

Kyle