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Take Profits Into Market Strength and Go To Cash - Trouble In August

Posted by Pete Stolcers on July 15

Posted 9:30 AM ET – Day traders should wait for support this morning. Opening gaps higher to resistance have a tendency to reverse. I will be watching tech stocks on the open to see if they still have “gas in the tank”. If we are going to see a gap reversal, it will happen in the first 45 minutes of trading and we will see long red candles closing on their low very early in the day. Once support has been confirmed we can buy stocks with relative strength. We’ve seen an incredible amount of intraday volatility in a 100 S&P 500 trading range during the last week. It’s impossible for me to tell you how the day is going to play out before the open. We will use the 1OP indicator to time our longs and shorts.

Swing traders should use this opportunity to get to a cash position and to reduce risk during the next two weeks. Day traders should look for early opportunities. Reduce your trade count and your size. I will be trading half-size in the morning and quarter size in the afternoon. I still view this as a low probability trading environment.

Support is at SPY $312 and $317.40 and resistance is at $322.70 and $323.40.

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