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The recent market rally (the S&P 500 closed at a record for the 66th time this year on Friday) has been a genuine team effort, with various sectors contributing to the gains.

Trading every single sector along the way may be suitable for some. However, to me, trading every sector all the time sounds distracting and chaotic.

I prefer to start my day with one trade, on one stock, at one time.

Before looking at technicals, let’s take a look at how today’s economic calendar is part of building a game plan.

When the markets go through stretches of low-impact economic reporting, I look ahead to when economic reporting may move markets (sometimes in a big way) in the future.

In today’s case, that day is Wednesday, November 24 (the day before Thanksgiving).

I’ll send you more information on Wednesday morning, but what I can tell you right now is that Wednesday’s lineup includes:

  • Jobless Claims
  • GDP
  • Inflation
  • FOMC Minutes…

…And more.

Now – ahead of Wednesday’s session – I already know I may want to consider assuming less risk than usual through Wednesday’s session.

With markets peaking this morning, I’ll plan on applying my usual near all-time high strategy. The best tool to outline this plan is today’s chart of the day, a SPY 60-minute chart.

SPY 60-Minute Chart

When markets open near all-time highs, often, traders close long positions, and shorts cover losses into strength.

This combination creates selling volume, and the way I can navigate that selling volume starts by identifying a level I’d like to use to start making a short-term bet against markets.

470.61 is today’s premarket high. As I’m typing, SPY is trading just below 470.61, making it a resistance level.

Therefore, as long as SPY trades below 470.61, I’ll be interested in trading SPY to the downside.

 

Think simple,

Davis Martin

Author: Davis Martin

Times like this are when SPY Daily triples in excitement.

My favorite company in the S&P 500 has hit markets with a bullish catalyst – right ahead of the Holidays.

This company is the #1 holding in the S&P 500, with a 2.5T Market Cap.

Notice the stock’s reaction upon news hitting markets?

As a veteran trader, I see an opportunity here.

The beauty of trading the SPDR S&P 500 ETF (SPY) is that I can be diversified without intentionally diversifying.

With the top 500 most influential companies in the country sprinkled into one ETF, I’m trading liquidity and diversification without assuming the risks of trading individual companies all the time (and I like that reward-to-risk).

But not all individual stocks in the S&P 500 are created equal.

Each of the 500 stocks in the S&P 500 has a holding percentage or accountability in the S&P 500.

Apple Inc (AAPL), a significant producer of hardware and software products primarily for the consumer market, has an S&P 500 weighting of 6.2% – the largest holding in the fund.

 

Just yesterday, Apple reported:

  • A ramp-up in its autonomous car timeline
  • Strong iPhone 13 demand (right before Christmas shopping sprees)

These are both positive catalysts for a company that wishes to scale and maintain a competitive edge in the marketplace, and Apple’s stock price soared.

Given Apple is the #1 holding in the SPDR S&P 500 ETF (SPY), it soared as well.

Here’s how yesterday’s Market Navigator trade of the day reacted to Apple’s bullish catalyst release…

SPY Nov 22 474 Call

It’s times like these traders like me get excited.

Heading into the holidays, I have:

  • Technical analysis
  • Liquidity
  • And catalysts…

I’m looking forward to it. Let’s start with today’s economic calendar.

While today’s is light, buckle up for FOMC minutes happening on Nov 24. That said, a SPY 60-minute chart, today’s chart of the day, will be my focus as I develop a trading plan ahead of the opening bell.

SPY 60-Minute Chart

SPY is showing volume-based support at 468.50. This level is just above SPY’s current trading price.

That said, I am bearish on SPY this morning due to:

  • Extended stochastics (momentum reading)

  • Today is expiration day

If SPY loses 468.50 today, I’ll be interested in trading SPY to the downside.

 

Think simple,

Davis Martin

 
Author: Davis Martin

The purpose of SPY Daily is to educate you.

On a high level, I try to walk you through pieces of my morning routine when I analyze the SPDR S&P 500 ETF (SPY) as I determine the Market Navigator trade of the day.

SPY Nov 17 467 Put

Recently, I laid out a level I wanted to use to buy SPY Puts. I want to teach you how it worked and lay a foundation for the day ahead.

On Monday, November 15, 2021, I made SPY Daily readers aware of my intention to trade SPY to the downside if SPY traded below 468.55, a critical support level at the time.

Planning my trade allowed me to trade my plan.

Without that trade plan, I may have wound up going long into resistance.

SPY Puts increase in price when SPY goes down and based on Monday’s Market Navigator trade of the day, as you can see, buying into resistance would have been a costly mistake

SPY Nov 17 467 Put

Examples like this are why I’m a firm believer in support and resistance levels. While all traders will be on the wrong side of a trade from time to time, identifying support and resistance levels allows me to visualize buying points, selling points, targets, stops, and reward-to-risk.

These things are essential to the well-developed trading plan I send to Market Navigator members at 9 am ET every trading day (on top of the actual trade of the day).

As you may know, a tool I study is an economic calendar, as I’m always on the lookout for potential market-moving catalysts.

While today’s schedule is busy, I won’t let it distract me from the technicals as today’s events are low-impact, which leads me to a SPY 60-minute chart, today’s chart of the day.

SPY 60-Minute Chart

As I’m typing, SPY is trading just below yesterday’s closing price of 469.28, making this level a short-term resistance level (as long as SPY remains trading below it).

Should SPY continue to trade just below 469.28, I’ll be interested in trading SPY to the downside.

I’m heading to the Market Navigator live trading room to work with members now, but if you missed November 15th’s edition of SPY Daily, you can read it here.

 

Think simple,

Davis Martin

Author: Davis Martin