Happy Sunday everyone, I hope your day is going well.
Let’s look at the weekly chart of SPY.
Although I’m still bullish on the market in the near term (2-4 weeks), if I were swing trading, I would definitely be selling at or near 320. We are still about 5% away from that target.
Airlines jumped roughly 10% this week. Weekly chart of LUV below the following paragraph.
LUV has formed a nice bottoming pattern, with prices moving lower, but with RSI moving higher (bullish divergence). It’s more significant because it’s on the weekly chart instead of the daily chart. I’m not sure why I didn’t take this trade, but if I took the trade when I intended to, I would have been stopped out just before the stock rebounded. That’s one issue I’ve found with short term trading – you can get the direction right, but you also have to get the timing right or else you will still lose money.
Speaking of timing, the shorter time frame we trade, the more we should wait for a better entry. On the contrary, this means that if you plan to hold for a longer time frame, it doesn’t matter as much when you buy, so trying to “buy low” isn’t as important.
Enjoy the rest of your weekend and have a nice Monday!