SPY finished last week in a small rally. The pattern play suggests we will gap up this morning. Today the S&P 500 futures are trading higher, so it looks like it could very well happen. However, SPY did rally right into resistance on Friday without moving through it, so we will have to wait till the morning to get a better idea. The dollar is trading flat, so that does not really give us any indication yet.
If we do gap up, I will buy SPY with a target to reach the high $111s to $112. Stop Loss, will be a couple pennies more than half of the Gap move. If we open below $110.34, I will wait and see if we can break through that level. Confirmation will give a buy signal. If we move down off $110.34, I will wait and see if it can confirm a move below $110. If that happens I will short SPY just like last Friday.
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