Next Up in SPY: 1370

Good Morning,


Let's get fundamentals out of the way. Greece is in the news daily and regardless of the outcome, the big question is are we priced in or not? Meaning, no one has a clue as to what the markets will do post announcement. I will talk about this "conviction/lack of conviction" in the technical session. Additionally on the fundamental side, the US data continues to improve. This week, we have a very light week of data and if recent data is any forecaster, when the data calendar is light, the markets move to the upside.

Technically, we obviously have a conviction and that conviction is to buy equities. 1370 is the technical level that if breached, will finally signal new highs that are clearly above last summer's highs. Again, as my webinars suggest, this "new economy" makes it hard to put to much emphasis on technical data that is "stale".

What I am looking to use to trade is recent data and solid technical patterns. There aren't any recent technical patterns in the broad markets, just the very strong updtrend and if you fight the trend, well, you know the consequences.

So using recent data and understanding the low voalitity, range bound day in forex led me to a nice day trading opportunity. No guarantees though that a rangebound day stays rangebound, so I used a pre-determined stop for a loss and target based on the charts and my trading timframe and overall risk appetite.

Check out the past few days of resistance in the EUR/USD and my thinking was, if the equity markets are rallying, the EUR should rally against the USD. As the equity markets approach 13,000, they may pause and if they pause long enough, the EUR may run out of steam at the old resistance level:

Past performance is not indicative of future results

Happy Trading and Be Environmentally Cool

Coach Brian
Forex is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.