I wanted to create an EDUCATIONAL post on how in addition to why SPY in addition to QQQ rallied in addition to so difficult on Thursday in addition to why i was in addition to so convinced the marketplace would rally difficult despite the market's initial really large gap downwards opened upwards on Thursday morning.
As many of you lot who were next my tweets on the @AOTtrades mortal feed in addition to also on @TraderStewie populace feed, i was really bullish on that 24-hour interval in addition to I'm going to walk you lot thru it, STEP BY STEP....
Ok, in addition to so coming into Thursday morning, nosotros were already long NFLX in addition to FB.... in addition to so coming into Thursday's open, the marketplace was gapping downwards large at the opened upwards due to roughly novel "Tariffs news" blah blah blah....... Remember, the tidings is almost ever irrelevant, it's the REACTION TO THE NEWS, that interests me most!
***Coming into the day, the Dow Jones was going to opened upwards downwards nigh 175 points, SPX was opening downwards xx points***
Ahead of the open, i took out my "SPY Road Map" chart(see below) to run into where nosotros were going to open....
I speedily noticed that SPY was opening downwards nigh the $279 surface area which has been rigid back upwards on numerous recent tests....
However, what made today's weak opened upwards in addition to so interesting in addition to so that not, entirely was it opening at just the $279 back upwards surface area but also, that the RSI in addition to MACD indicators were HIGHER than the previous fourth dimension SPY tested the $279 area... since RSI in addition to MACD were higher than the previous time, that correct away told me, they were making a HIGHER LOW hence telling me, that today's downwards opened upwards is WEAK in addition to UNSUSTAINABLE hence odds of an upside reversal were really high.....
I genuinely tweeted this out shortly after the open:
"Today is a proficient examination for the $SPY, $QQQ... equally they RETEST support.... Note... ..on this RETEST, nosotros withdraw to scout how the MACD in addition to RSI acquit here... if RSI in addition to MACD proceed to shape a HIGHER LOW equally $SPY, $QQQ retests support, odds increment for a rigid bounce stage soon."
Influenza A virus subtype H5N1 few minutes after the open, SPY, QQQ started to bounce, they wasted no time... in addition to so that increased my confidence that a large reversal in addition to rally 24-hour interval was brewing here....
Note the mini HAMMER candle inwards the higher upwards SPY nautical chart shortly after the gap downwards opened upwards in addition to correct off $279 support.... the RSI in addition to MACD higher lows were really visible at thus indicate in addition to firming upwards fifty-fifty to a greater extent than aggressively...
Influenza A virus subtype H5N1 few minutes after the open... i started to discovery many of the large stocks started to opposite to green, despite the overall marketplace all the same good inwards the RED.... Stocks similar FB, MSFT, GOOGL, NFLX were starting to teach from RED to GREEN... that's when my confidence of a reversal went from 75% to 99% !!
... in addition to that's when I tweeted this out ...
"$SPY bouncing hither equally RSI in addition to MACD are carving out a HIGHER LOW .... This is setting upwards for a wicked bounce...."
....At this point, SPY was pretty much almost FLAT(see nautical chart below).... piece the clear cutting leader was QQQ....
Meanwhile, i noticed that "trader sentiment" on twitter was all the same surprisingly bearish or skeptical at best(not many bulls), which entirely farther increased my confidence that this rally 24-hour interval was entirely getting started in addition to that's when i tweeted this out....
"$SPY ... upwards a cool +$1.5 since this posting tweet/chart in addition to i suspect, this could last merely starting!"
Note the STRAIGHT UP motion inwards QQQ after the initial gap downwards open....
....Fast Forward a few hours later....
Our NFLX seat was upwards a proficient +$8 points since our entry in addition to FB was upwards $6 since our entry ....
I tweeted out this:
"How bout that $SPY chart, folks?! Up almost +$3 since posting this SPY nautical chart at the open! Learn to spot those RSI + MACD divergences! Especially on indices, this designing is equally rigid a purchase signal equally you lot ever gonna get!"
This is 100% true, LEARN TO SPOT these RSI in addition to MACD divergences on the indices!!
RSI in addition to MACD bullish divergences are equally rigid a "BUY signal" equally you're ever gonna get, particularly when you're analyzing the indices....
I promise this educational post volition assistance you lot spot these divergences going forward!!
Happy Trading!
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