The SPY has moved upward, as expected, after the successful bounce off support on Monday.
Next up is some resistance from the descending SPY tops trend line ( 3 points on that line, see chart below) at around a price of $210.
I plan to take some profits at that level, and leave some on the table for a run higher.
No need to get really worried about a correction until we break below SPY $202.
The battle between the bulls and the bears at the 50 week moving average on the SPY was won by the bulls yesterday.
Once again, the buyers came rushing in to keep the price above the key support of the 50 period average.
See the chart below.
Yesterday, I added to longs. As the day progressed and momentum swung towards the buyers, it made sense in terms of risk reward to add to long positions. Buy at support, lighten up at resistance.
The outlook remains less than perfect for long positions, as usual, with plenty of supply overhead to keep prices in check, and the most recent SPY highs to offer additional resistance to a move higher.
Despite the obvious risks, I remain biased to the long side.
Today will be a key day for clarifying my perspective on short term market direction.
The inability of the SPY to close above the 50 week moving average at the end of last week was a violation of the uptrend.
If the SPY does not close above the 50 week and 50 day moving average, today, I will raise cash and perhaps add to short positions.