The SPY last made new all time highs back in May 2015. We have been range-bound going sideways for over a year. No way to know if it is a pause that refreshes or a top, except in hindsight.
Since May 2015, the market has tried to drive the SPY below 180 which held, and above 213 which failed 3 times. The range is clearly defined.
The Brexit hemorrhage has caused technical damage which the chart makes clear. We have no idea what fundamental damage has occurred.
Great, now what do we do?
Turnaround Tuesday? Not in my opinion. This is a dead cat bounce.
Today’s bounce is an opportunity to scalp the fast moving 3x ETFs.
I can only see, and successfully trade, oversold, overbought, support and resistance.
Low of the day yesterday, around SPY 198, is the stop point on long ETFs.
204 is the resistance line above I have to expect will hold.
My plan already underway is be aggressively long in FAS, TNA, SOXL, SPXL with stops at SPY 198, adding and trimming until/if we hit SPY 204.
If that resistance holds, I will pivot, and get aggressively short with TZA, using a cover stop of SPY 204.
Time to execute that plan.