Lets Talk Some More About the Range

Well, we are at the top of the range again for the the 3d time (see charts below). Take note of the shaded blue boxes in the charts, they represent the previous 2 times. Note that the SPY Gapped up in each case, then stayed around the upper half of the range for three consecutive days. On the 4th day we gapped down and traded at the bottom  half of the range for two days. Will this pattern continue? I don't know, but a shorter term trend worth looking at shows that each of the previous first days of the range pattern (11/16 and 11/23) declined from their highs and continued the down trend into the next trading day.

We failed to break new highs today after touching the top of the range for the third time so you can see that the down trend into the close indicates the pattern is being respected. If this is the case, expect this trend to continue into tomorrow's trading. If we can Gap down in the morning below the 100 day moving average and below today's open of $110.92, we should be able to move down towards the $110.34 level on SPY.

SPY 15 Minute Chart Showing Range with Pattern Elements Shaded in Blue

SPY 15 Minute Chart Showing Range and Target Price of $110.34

Since we did not break new highs today, Shorting the SPY for a swing trade now would also be a descent move. Obviously you would pick a Stop Loss price somewhere above the $111.74 mark and look for a target around $109.25. This price point would likely be reached on Friday assuming the pattern plays itself out for a third time...