All the selling yesterday and the gap down today... just got squeezed. It seems that the bears never catch a break. Will the market continue higher again tomorrow? They are so close too the 11,000 mark on the DOW, that I think everyone is expecting it now. Does that mean it won't happen?
I can't answer that, but the SPY did have a fake print on Wednesday of 119.35 on the 10 minute chart... which would probably be slightly above the 11,000 mark on the DOW. Could that be the finally target before the drop? Maybe? But we also had another fake print today at 117.65 SPY. Which one will play out is unknown... maybe up first, then down?
Currently, we are still in the channel up from the 1044 low last month. We fell outside that trendline today, but rallied up and closed right on it. The market is slowly starting to crack, and tomorrow is extremely important, as we bears are looking for a close outside that trendline to get the selling started. A close tomorrow inside that trendline/channel would really hurt the bears that are looking for a sell off next week.
Next week is generally bullish, because it's option expiration week. So, that is another strike against the bears. They are truly starving every bear into extinction. Will there be any selling next week? I think they will, but I've been wrong many times before.
Typically, they will pin the market on whatever level benefits them the most. So what level is that on the SPY? You can look at the open interest at each price level too get some type of idea, but it's not always accurate. Looking at the 117 level, there is now 213,816 puts and only 100,087 calls. That could be the place they pin it next week. Also, the 110 level, (which seems a long ways away from where we currently are), has 213,749 puts, and only 10,918 calls.
Needless to say... we're not closing below that level next week! The 117 level looks more likely, and of course my puts will expire worthless at that level (because that's the strike price I purchased). None of this means anything if they decide to tank it next week, (that's what many of us are hoping for). On a dump out, you could easily see 50 spx points, which would be 5 spy points. That would put us in the 113 area, which would also fill that gap up around that level on March 5th.
For now we must simply wait it out, as Fridays' usually have light volume... which means it's not likely to do much tomorrow. I hope it does, but I'm not counting on it. I'll just hang tight until next week, and see if they take her down or not?
Best of luck to all of us...