The Waiting is the Hardest Part

The S&P500 has 'bull trapped' its way back to strong resistance.  It has been a swift and strong rally off the December lows from $SPY $231.99 to almost $SPY $282 in just over two months.

Yesterdays morning collapse brought back memories of last years failures at this same level.  Is the market setting up for a 10% plunge?  Time to sell?   I noted in the chat room yesterday morning when their was questions why the market was selling off... there are no shortage of excuses to sell these days.  And from my perspective, that is actually a good thing for the bulls.  This market has been feeding on the negativity since the lows in March 2009.  Yesterday weak economic data and the big I word...  impeachment,....  was back on the table.

We've heard that one before.

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The question today Is,  when the heck is that bull trap thats been set  from $SPY $231  to $$SPY $280 finally going to go off?  Anyone?  Anyone??? Bueller?  Bueller? Bueller?

Yesterday pre-market it looked like the time had finally come to put 2,800 and $SPY $280 in the rear view mirror.  However price action had another idea.  The selling began early and often and didn't stop until modest early gains turned into heavy mid-day losses.

Once again an attempt to rally was thwarted.

From my perspective it is different this time around.  Yesterday, unlike in late 2018, the dip was bought.  Sure the market didn't reclaim the morning highs, but there was fight. The VIX soared 23% early on, but by late afternoon it was back down with only a 7% gain, and under that key 15.00 level.

and looking back at the current SP500 chart, notice this test of the 2800 level has been met with more consolidation than the previous three attempts.  In 2018 a test of 2800 brought with it a nasty reversal, not the sideways chop we've seen the past two weeks.

The last ten trading days show a market consolidating, digesting, and readying itself for the next move higher.  It is different this time around with the 2800 test.  At least in my opinion.  Those who have been calling this market rally  a giant bull trap.... well they are probably penning another confirmation of that 'bull trap'.... but at even higher prices than their previous bearish article.

As I said a few months ago at much lower prices, I think this market is going to bull trap its way to new record highs.  While not many believed me back then, we are a lot closer than we were last month.  As long as the dips keep getting bought, it is only a matter of time before we break 2,800 and put it in the rear view mirror.  It could be today, tomorrow, or next week but I think its coming.   The waiting is the hardest part.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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