Market Rally Alive and Well - Bullish Speculators Getting Flushed Out
Posted by Pete Stolcers on February 17
Posted 9:00 AM ET – Yesterday we saw a light round of profit-taking and that is spilling over today. The market has staged an impressive rally and it got a little ahead of itself. This is a three-day weekend and investors are locking in profits.
The breakout from three weeks ago is legitimate and all of the pieces are still in place for a rally. Look for soft price action this morning. Minor support is at $233.50 and I’m expecting it to hold today. When sellers can’t push the market lower this morning we will see a reversal.
Yesterday I told you to be patient and to stay sidelined if the market made a new low after the first hour of trading. If you followed my advice you stayed out of trouble. The selling pressure was persistent and stocks did not rally until late in the day. The same advice holds true today.
Bullish speculators piled in on the breakout and they are being flushed out. I’m expecting positive price action next week.
If the market closes below SPY $233, swing traders should exit long positions. You have nice profits so lock them in and enjoy the weekend.
I still believe that any dip will be a buying opportunity.
Stick with your calls as long as the SPY closes above $233. You should also have technical stops based on the stocks themselves.
Look for early selling and bounce mid-day.