Hi everyone, I hope everything is going well!
I will discuss some key price levels for the indexes.
I’ve highlighted some key support and resistance levels on the DIA. We are currently at the upper end of the 252 to 260 range. Although this could be the start of a bullish flag pattern, I think there’s a better chance we move towards 252 and break down lower. However, I wouldn’t take a trade in either direction until the index moves above 260 (go long) or below 252 (go short).
I still don’t think the indexes will make new all-time highs this year, and even if we do, I don’t suspect we will hold those levels since the P/E ratios of the S&P500 are well above its historical average.
For QQQ, the local resistance level is at 187 (all time highs), and 291 for SPY (also all time highs). Like I discussed in previous weeks, shorting DIA and going long QQQ would be a lower risk “pairs trade.”