The S&P played to form with buyers coming in at converged support and 50-day MA. There was even a morning sell off and recovery for those nimble enough to take advantage. The intraday picture is nicely set up for an upside breakout. Â Short term (long) traders might want to take partial profits at 20-day MA, but a larger push to sideways resistance around 1,880 is not out of the question. Risk measured on a close below today’s lows.
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The Nasdaq recovered yesterday’s losses, and enough to trigger a possible ‘bear trap’ from a redrawn channel. Â Measure risk on loss of 4,052.
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The ‘bear trap’ in the Russell 2000 is also a longside opportunity. Play for a move to hashed-line channel resistance. Technicals are not oversold, which may lead to a secondary push lower – so a long trade needs a stop.
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For Wednesday, hold for further upside, using Monday’s lows as an area for stops. A break of Monday’s lows would not make for a great short-side play as the potential for whipsaw would be high. But the 200-day MA is an alternative downside target; assess risk:reward accordingly (today’s highs as a stop for short-side positions).
