When I’m putting my weekly outlook together, I am, most the time, early in my expectations. The last outlook I put together I was showing my bearishness, and that had a lot to do with my economic view. With the slow rate we are growing as an economy I thought the S&P was crazy for breaking into 1570. But like any good option trader you can be wrong on the direction and still make money.
This outlook is for the next couple weeks. First off Friday couldn’t have ended anymore text book in my opinion, testing the up trending channel line (yellow line) almost to the penny then buying come in and we created a hammer-ish candle. The tape action on Friday feels like we might struggle around here or what I think is more likely is we rally up to 1580 within the next week or so. Ultimately with the slow rate the economy is growing and the amount we are up YTD in the SPX makes no sense to me, but over the last few years I know that the market can surprise even then most seasoned trader.
My conclusion is we remain intact with no further downside pressure with an upside target of 1580. And at my target I will suspect some resistance to form, some new shorts to be taken and possibly the blow off top that will accelerate our spring time correction.