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I Need a Couple More Days
The SPY broke out of my channel today on a Trump tweet.
At 3:00 pm, Trump posted that he was holding off on the planned military attack on Iran. The market ripped. The candle popped right out of the perimeters I have been using as my channel, and it closed outside.
This is concerning, absolutely. But it is one candle, and one candle is not enough.
It's so funny how Trump at 3:00 decided to do this news. A lot of stuff happens during the start of the hour, and this is one of the reasons we push the fuse trade back to 3:15.
I'm not kidding when I say we've seen this before. We could wick right back up into the channel, and the traders who flip bullish on the first candle get their money taken by the same chart a couple of days later.
I need a couple more days of this to see if we are going to drop. Until I see the Qs and the SPY trade a couple of days outside of this channel, my read does not change.
We are still in bullish territory.
The IWM chart showed me this exact movie back in April. The Russell was abiding by the perimeters nicely until we had a couple of days outside the channel. Then the drop came, and momentum on the Russell turned negative on April 6th.
That's what I'm looking at right now: a couple of days outside the perimeters, not one Trump headline at 3:00.
This is where most traders lose course. They see the candle pop out of the chart and they flip the bias, reposition, size up, and start buying. Then the wick back into the channel takes their money.
The most important part is to know exactly why this is happening, and right now we know why. The 3:00 pm Trump tweet on Iran is the catalyst.
The catalyst can be real, or it can be a Fib fakeout that pulls us right back inside the perimeters. We do not know which yet.
Here is what I am asking this week. Where does today's candle close, and is the SPY back inside the channel by Friday? Did the news provide a real catalyst, or are we looking at a Fib fakeout?
You answer these questions over multiple sessions, not at 3:00 pm on a Monday.
So I am eyeballing the chart, and I am waiting for confirmation. We are still in bullish territory until the chart proves me wrong, and one candle on a Trump headline has not done that.
Watch this week, and I will be back with what I see.
Rock On,
Voz
P.S. Tuesday at 1:00 pm ET, Hannah and I are walking through the 3:15 Money Window live. This is the exact trade we make every day at 3:15 PM ET — up or down, 30 minutes to close. We're right 80% of the time, and the average winner is 57%. If you want to see how we read the setup and place the trade in real time, join here