TheSlayer's Market Thoughts

SPY April 18 2013

Today was another down day, so naturally everyone went short. Just as naturally, futures then went up after hours and creamed those who went short. Same as it ever as.

The chart hasn't been speaking during this run, it has been yelling. We stopped our down day right at the low value node, as indicated on the chart. That's why we chart and use these studies, volume is very important. Since our stop was right below the low value node, it was not triggered.

A simple move outside of the uptrend channel does not mean we head straight down. The market could just as easily move back into the channel. It was foreseeable that we were headed for trouble at these heights because of the psychological nature of the "all time high." Never discount the effect of basic psychology and "bright lines." If you hear everyone talking about a particular level, the market will tend to notice. However, you still need to play the market and not the "obvious." Topping patterns can be very painful if you just make up your mind, cross your arms, and wait for the inevitable drop with an expectant look in your eyes.

Watch the key zones on the chart, if we drop through 1520, the 1400s are not far behind.