Here is an excerpt from last weekends “Weekly Market Prep” that is sent to our premium subscribers. SPY- While the Nasdaq, Nasdaq 100 and Russell 2000 have either marked or threatened all-time high territory during the most recent rally, the S&P 500 has been far weaker being rebuked on 3/12 and 3/13 at the 78.6% retracement level. The SPY ETF that we use to track the S&P has traded lower for five straight sessions chalking up distribution days during three of those sessions. This now leaves the ETF with seven distribution days over the last 18 trading days which raises a caution flag for us. The index closed just beneath its 50 day simple moving average, while it still holds above the exponential average we prefer to use here. With the Nasdaq showing relative strength, we feel it is important for the index to at least find support at the key 50 day moving average. It is likely a large divergence between the two indices won’t carry on for an extended period of time. This led to trading alerts from myself and Greg for our members to go long inverse ETFs SQQQ and DXD earlier in the week. We booked partial swing gains of 10.5% and 9% on those positons Friday and members are currently sitting on gains of nearly 15% and 10% with the second half of their position.
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