The market bounced strongly after the Fed promised to keep interest rates low through mid 2013. While it was a nice start, the market is still in a down trend (see ten day SPY hourly chart above). I am going to look for more evidence of constructive price action before I feel comfortable taking a swing trade. That may mean I may (or maybe already have) missed buying at the bottom, but trying to guess the bottom of a steep correction like the one we just had is difficult to do, and does not suit my style of trading. I will be watching for the SPY to hold above the 115 level. The next level of upper resistance could be around 119 where the downtrend line and 5 DMA meet. I would not be surprised to see a challenging and volatile market ahead. After a steep emotional drop like we had over the last week, a highly volatile and difficult trading environment is not uncommon. I am going to be very careful.
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