07/19/11 Market Action

Market had a strong day today. It is going to be important to watch if the market can hold these gains. If it can that may provide some evidence that this rally can hold and perhaps the market can work it way up to the top of it's trading range around 136 or 137 on the SPY (see figure 1).  The bigger picture still looks choppy to me, so if the market holds up well here I may try some swing trades with smaller than normal position size.  In Figure 2, I have highlighted what could be important levels to watch for on the SPY. I think if the SPY can hold above 132 tomorrow that would be constructive and I would consider taking positions for a swing trade in stocks where I can find a high reward to risk setup.



Figure 1


Figure 2