“Never be afraid of the normal movement, but be very fearful of abnormal movements, it is similar to a major change in personality” – Jesse Livermore
Despite closing near the high of day after a big day of sell off, the S&P index has traded in the narrow range of 25 points from 1490-1515 in past ten sessions. Lately it has been vacillating within a broader range since the Dow has hit the psychologically level of 14,000. SPY closed at 151.05, 0.43 off the session high of 151.48.
The gyration moves have changed traders’ stance toward market on daily basis; random price action on individual stocks with big gaps continues. It has become a market of “Buy Dip, Sell Rip”. But how long will market rally last ?
Many stocks look fatigue and are well off from their recent highs after their earning reports, seen in IBM, WHR, LVS, AMZN, GOOG, MA, FB, etc.
When many stocks are becoming wild puppies and market behavior is becoming bipolar, it’s time to get defensive and cautious. Trade wisely with caution!
Here is my SPY daily chart with notes:
Thx Angela. Excellent blog this week. Wise words indeed. BTW do you think “Buy Dip – Sell Rip” would make a popular tattoo? Just wondering, LOL.
Very sound advice!
Any comments on the continuing meltup in the markets.So similar to recent runups. shallow pullbacks. sector rotation , Fed induced buying etc etc.
This market keeps having melt up with divergence seen in different names & different sectors.. Stock picking has been important. Let’s see low faar/long will $SPX go up before correction occurs!