The daily chart on the S&P 500 (SPX) is an absolute mess.

There isn’t really much to like about it in terms of determining future market direction. 

What has helped me quite a bit in navigating this market is the 30 minute and 1 hour chart. These two charts provide a lot of clarity in terms of the market’s direction and has been a main driver behind my trading decisions. 

Notice on the hourly chart below, just how well formed the channel is, that we are trading in. Clearly, on this time frame we are in a downtrend. That is why I have been careful about adding significant long exposure when we do have those rallies in between, and when I do, I aggressively book the profits. 

Careful in this market, I think we are prime for some heavy selling. That doesn’t necessarily guarantee it to be so, but to manage risk under the belief it could happen, is entirely appropriate here.