07/06/11 Probabilities and Market Action

After making a huge a run last week, the markets are holding up remarkably well. After such a huge run it does seem due for a correction, but anything can happen. It could make a run for the years high (137 on the SPY). As a trader you have to think in probabilities, since nothing in the market is a certainty. I am holding some long positions and will be doing my best to manage risk in those positions by moving up the stops as necessary. While I feel vary about adding new longs here, I might add small positions tomorrow, if the uptrend continues (SPY holds the 133 level)  and I do not see signs of a larger pull back. Despite last weeks huge move up the buyers still seem to be in control.

A chart of the SPY: