SPX: Where we are at

It is time to wait! Be patient and see where the market is going to go, that is where the smart trader should be right now. The SPX is hitting resistance and support. Let’s check out the chart –

We are still below the 200dma and probably will be until sometime in June or July. The 50dma is flat. You can see the upper resistance line created from the double top made back in February and the weak support line angling up towards the resistance line. This starts to put strain on the index creating pressure the longer it stays locked between these two lines the more pressure and when the break out occurs the larger it will be or so the theory goes. Doesn’t matter for the present because we do not know which way the market is going to break through. We need to sit and wait.

When the breakout happens, then we make the decision to trade. If the market breaks to the downside it would be safe to trade a bear credit spread above 875 resistance. Now if it breaks above 875 then some more waiting has to occur till SPX comes back and retests 875 or at least makes a new support higher than 875.