What Today Means for Those of us Holding onto our Shorts

Yesterday you can see that we broke through Major Resistance at $110.34 on the SPY. However, the move was short lived as we stayed above that key resistance for less than 1 hour. That is not a sign of strength. Today we are looking at some key areas on the chart that should confirm direction one way or another. We are trading in a very important range between $110.34 and $109.59 (See Figure 1). We need to move below the bottom of this range today to support the Bears cause. If we close above the the $110.34 level, that would spell a lot of trouble for my short position as well as any bear mentality. I suppose it is appropriate that we are flirting with this key $110.34 level as I write this. I think we need to flirt and put a little fear into the minds of the bears... test their will and resolve before we can reward them for their savvy technical analysis and understanding of these markets.

Figure 1.