The opening bell rang and this market was again headed lower! That’s four straight days of the market opening in the red. Astute Strategist was watching this market carefully, and as we kept heading lower on the day, we mentioned to subscribers that this market was overdue for a bounce. It was as though the writing was more than just on the wall, and it was time to sell volatility!
After the first hour of the day, we had seen the market making higher lows and looking ready for a bounce. We got long AAPL and the QQQ. Having been watching this market, we elected to place bullish trades on the equities mentioned in our own personal accounts. Profits were realized! We bounced 310 Dow and 43 SPX points by the close. Have the bears gone back for further hibernation? Unlikely, as in our opinion, we can see more volatility in the week ahead, though less than the previous two.
Support and resistance levels are now at 24,100 and 25,430 respectively. As mentioned in past posts, a failure to close above 25,974 for a directional change and 25,430 for the week would suggest a retest of support next week at 24,100. This is all to suggest that given where we closed, in our opinion we would likely retest support before moving higher.
What’s next? Keep a close eye on these markets and as soon as volatility spikes again, we will be selling volatility and getting long equities we want to own.
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