Ignore The News -- It's All About Support And Resistance
Over
the weekend, we addressed the news from Spain. But we didn’t obsess
about the news itself — instead we talked about how we were going to use
REACTIONS to the news in the indexes to form our game plan to profit
for the week.
And
that’s the key — Greece, Spain, Italy, US jobs reports, etc. etc.
etc??? We just pay attention to the charts and do what the charts tell
us to do. And nothing can be more simple than paying attention to
simple support and resistance.
It’s
really that simple — when the markets and stocks hit resistance, we
short or buy inverse ETFs. When the markets and stocks hit support, we
buy stocks.
And
we are still half way between support and resistance. Care to guess
what we are going to do when the indexes and leading stocks hit
support? That’s right, we’ll be buying stocks.
Over the weekend we said:
“Who cares, it’s all about support and resistance (as laid out) and that is all you need to know.
With a market potentially going range bound here it’s all about buy the
dips (cover short sells) at supports and sell the rips (take on short
exposure) at resistance.
So
what are we going to do about it? Well in the event of a pop (think a
rip the face off of short sellers GAP open) we’ll be at resistance and
that’s a sell the rips time which is also a consider short sell time.”
We also said over the weekend and this is the game plan for the week:
Great bring it on
as it’s Wash Rinse Repeat all the while we get in get some points and
get out long and short will be the mantra. Either way it’s all about support and resistance.
As you can see
from the charts of the indexes, all the Spain news did was take us up to
resistance where the indexes promptly rolled over:
The same goes for
2 stocks on the watch list for our paying subscribers — LQDT and SWI.
As a result, we issued a Trade Trigger email alert on each:
SWI — Short at $44.68, now at $42.86 — a 24-hour return of 4.1%
LQDT — Short at $65.45, now at $62.18 — a 24-hour return of 5%!
So
what’s next???? We’ll look to cover our short positions as the indexes
hit support and at that point, we’ll look at buying leading stocks that
are also hitting support in tandem with the indexes.
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