SPDR S&P 500 ETF TRUST

SPY bounce at 400

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Ok so the SPY has gotten through the choppy area of the 420s. Now, there are no major supports before it gets to 400. On the chart I drew out 3 possible scenarios, or ways I'm looking for the market to start a bounce at 400. The first one is if we trade down to 400 during the day, especially early in the day, I'd look for the bounce later in that day. The second possibility is if the SPY sells down into close but we are not at 400 yet, and then the SPY opens below 400; BUY THAT OPEN!!!! The last possible I'm look for is if the SPY just sells down into close for the day, getting below 400; it will probably go through that level with relative ease. Don't know what day this will play out but looks like it will be soon, like within a week; but I would not look to play the bullish bounce with options less than a week to expiration. And the reason why, is the last thing I will caution you with, watch out for scenario 1 turning into scenario 3. Where we get below the 400 point level early one day, start bouncing, and then the end of day start selling off and make a new daily low going into the close. That's why you want to give yourself a little bit of time on the options. I'm going on vacation, so if it happens while I'm gone I wanted to give you what I was, am, looking for. I do have take profit stops at those level but if it does it while I'm gone I might not get into bullish positions. Good luck and make that money.

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