The SharePlanner Reversal Indicator is showing that this market is at unsustainable levels, and in need of a pullback before it can rally and push back higher again. The market has seen little-to-no relief this entire month. Since 1/8 the biggest multi-day pullback has been 1.5 points on the SPX... seriously, that is unheard of. Before that it was just a two-day pullback on 1/7-1/8 which was 9 points. Since the beginning of the month we have rallied from 1402 all the way up to its current price of 1506; a 104 point rally, with the largest pullback being to the tune of 9 points. That is more than a 10:1 ratio and I can assure you that won't last.
The issue becomes how we are suppose to time this pullback. Bearish divergences continue to abound including the VIX, T2108, and other major indicators. Patience is key though, because this market with the backing of the Fed's policies can push this market higher then you'd think possible.
Stay nimble and keep managing that risk.
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Ryan (@shareplanner) specializes in swing trading strategies and is the founder of SharePlanner which he created to help and teach others on how to trade stocks better using multiple approaches and time frames. Each day you can count on Ryan to provide his trading advice as well as transparency in every trade that he makes. Ryan Mallory resides in Central Florida. More >>