Punked on SPY

My first trade of the day worked out nicely. It seems like gap fade trades have been working out really well lately. For a while I couldn't get a gap fade to work to save my life.

Today's nearly stopped me out with that violent push up on the second candle. But two long legged dojis later we filled the gap and more.

My second trade of the day sucked. I thought I had a perfect setup with a doji at several points of resistance after new lows on the MACD and the TICK. As soon as I took the trade it went against me with two mean up bars. Ouch.

I got really aggressive with that trade and risked 2% of my account. It is all gone now. *Sniff*

In retrospect, I should have been much more careful in my aggression level. Looking at the daily chart of SPY gave us a clue as to what might happen today.

The 200 day simple moving average has been acting as support for several days and the bears have been unable to push price below it on a closing basis. After 3 days of the bears losing out on their plans, it makes sense that the bulls would be able to push things up.

Now we'll just have to watch the 20 and 50 period moving averages. They are about to cross forming a formidable barrier for price (around 900). If the bulls can't push above the averages, we may have a shocking move down. If they can push it above we could have a big move to the upside. Keep your eyes peeled.