Stocks at resistance - beware of breakout
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Stocks have continued their ascent, but a caution to the bulls: Price is tagging major resistance. Although there is a possibility of an upside breakout, the probability is that even if a breakout occurs, it is too late in an upward thrust, with momentum waning; hence any breakout will be very susceptible to reversal in this trader`s opinion.
The below daily chart of the SPY shows the power of price gaps, with two gaps waiting to fill the downside:
The gaps may need to fill before another leg up in stocks can begin. Certainly, the first gap is a flashing target for any traders looking to flip to the short side.
Thanks and have a great day.