In this post, the top chart below, I shared that the markets reminded me of the “Ground Hog Day” movie, per the same thing happening over and over again. At the time of that post, we were scoring on defense. With the market approaching support, I suggested to “bring stops down to protect profits, right now!” The 500 index hit its low THAT DAY on support.
Trade the range has paid off….Here we go again at the top of the range?
Game plan… Tighten 500 index stops on long positions to just 2%.
With Emerging Markets breaking out and the high yields reflecting relative strength, odds favor the range will break to the upside, yet playing the odds, one has to respect the weight of resistance at (2) in the chart above.