Ahoy there Trader! ⚓️
It’s Phil…
🎂🎉 SPX is tightening up, and the Bollinger Bands are doing their best impression of a boa constrictor.
Price is stuck in one of the narrowest ranges in weeks, meaning a breakout is coming… but not just yet. So, what’s the plan? Pause the Tag ‘n Turn, pivot to range trading, and prepare for the inevitable move.
Let’s break it down!
SPX Deeper Dive Analysis:
🔍 SPX Trading in a Tight Box
- Bollinger Bands are pinching, signalling contraction.
- DJX shows an even clearer squeeze, reinforcing expectations.
- Price is stuck in a narrow high/low range – a setup for a breakout.
⏳ Time to Switch Gears
With this range-bound action, I’m pivoting to my six money-making patterns, focusing on the four range-trading setups:
1️⃣ Buy range lows for bullish opportunities.
2️⃣ Sell range highs for quick profit-taking.
3️⃣ Buy a breakout of range highs when momentum confirms.
4️⃣ Sell short a breakdown of range lows if the bears take control.
For now, I'm already positioned bullish, so a bullish breakout is preferred. But I’m keeping my bear hedge triggers intact in case things turn sour.
🔄 A Quick Drop Before a Breakout?
- $ADD is at a bullish extreme, hinting that SPX may test the range low before any real move up.
- This means a little downside shuffle before a breakout is very much on the cards.
- If so, I’ll be adding to my bullish positions near the range low.
🎂 Taking a Birthday Break!
Since the market has decided to play the waiting game, I’m taking this as a sign to start my weekend early. 🍰🥂 Let’s see what unfolds next week – a breakout, a fake-out, or another squeeze!
Fun Fact: 🎈 Stock Market Birthday Anomaly?
Historically, the market has an upward bias during the week of a trader’s birthday – but only if they take the day off. (Okay, I may have made that up, but let’s see if it holds true!)
📊 Real Fun Fact:
The shortest bear market in history lasted just 33 days – the COVID-19 crash in 2020. Even market meltdowns can be short and sweet (like cake).
Happy Trading,
Phil