Ignore The News — It’s All About Support and Resistance
Over the weekend, we addressed the news from Spain. But we didn’t obsess about the news itself — instead we talked about how we were going to use REACTIONS to the news in the indexes to form our game plan to profit for the week.
And that’s the key — Greece, Spain, Italy, US jobs reports, etc. etc. etc??? We just pay attention to the charts and do what the charts tell us to do. And nothing can be more simple than paying attention to simple support and resistance.
It’s really that simple — when the markets and stocks hit resistance, we short or buy inverse ETFs. When the markets and stocks hit support, we buy stocks.
And we are still half way between support and resistance. Care to guess what we are going to do when the indexes and leading stocks hit support? That’s right, we’ll be buying stocks.#-ad_banner-#
Over the weekend we said:
“Who cares, it’s all about support and resistance (as laid out) and that is all you need to know. With a market potentially going range bound here it’s all about buy the dips (cover short sells) at supports and sell the rips (take on short exposure) at resistance. So what are we going to do about it? Well in the event of a pop (think a rip the face off of short sellers GAP open) we’ll be at resistance and that’s a sell the rips time which is also a consider short sell time.”
We also said over the weekend and this is the game plan for the week:
Great bring it on as it’s Wash Rinse Repeat all the while we get in get some points and get out long and short will be the mantra. Either way it’s all about support and resistance.
As you can see from the charts of the indexes, all the Spain news did was take us up to resistance where the indexes promptly rolled over:
The same goes for 2 stocks on the watch list for our paying subscribers — LQDT and SWI. As a result, we issued a Trade Trigger email alert on each:
SWI — Short at $44.68, now at $42.86 — a 24-hour return of 4.1%
LQDT — Short at $65.45, now at $62.18 — a 24-hour return of 5%!
So what’s next???? We’ll look to cover our short positions as the indexes hit support and at that point, we’ll look at buying leading stocks that are also hitting support in tandem with the indexes.