What to Expect This Morning

I expect a choppy market from now into the close of trading this week. I will look for short opportunities off the same levels as yesterday; $110.34, $110.45 and the high point of $110.58 on the SPY. We may get a chance to test those levels both today and Friday. If we don't get that opportunity this week, then perhaps Monday is the day, but I think it is worth a play at any point we hit those levels. If do expect the SPY to reach $110.50 before we take a significant turn to the downside, it hasn't reached that point yet...

How will I play it? Well that is an important question. Although I believe we may not get a significant move until next week, if there is an opportunity to get into a swing position today or tomorrow, I will make sure I set myself up to do it. If I don't or if I cut my profits short, there is always the chance that the markets do continue their move without me. I would rather take a swing position Short and if it goes in my favor, I will just set a break even stop. If the market comes back up in the coming days, then no harm done. I am still in position for what could be a short term top in the market. I believe that we will be seeing the low $102s on the SPY in the not too distant future.

That being said, we can't rule out the possibility of breaking to the upside and through these levels. Any confirmation above $110.60 should raise alarms signaling more strength for the bulls. As I said yesterday, the next levels of resistance above that are $110.68, $111.10, $111.44 and then another key level around $112.

Watch for a false break out as well. If that happens we might see a sharp spike upwards to maybe $110.68, only to see it retreat back down quickly...