SPY-1MIN
SPY-5MIN
Today my bias was to look for long setups to buy into as long as SPY stayed above yesterday afternoon's breakout area of 108.50 (see 5min chart). There was a perfect opportunity to get in when spy consolidated and spiked down to gap fill the small gap. That was the perfect place to enter a small 1 lot position (see 1min chart). The play then is to add a 2nd lot on breakout of the morning range of 108.75 and stay long until the steep trendline gets broken or just as 10am approaches. The 2nd entry point would have been the retest of the morning breakout at 10:21am and stay long as long as price is above the 108.50 area. So I now should have 2 lots. One lot was sold on the run up approaching 10am and another lot added on retest of the morning range breakout area. I would lighten up 1 lot again as price again approaches the morning high, and then adding 1 lot again as price approaches the 1st retest of morning range breakout. This is so because we've just seen a higher high developed in the spy and one should go long again looking for a higher low. The stop can now be moved up to just below the low of the 1st test of the morning range breakout area. We stay long as long as this is true and wait for spy to form its pattern, ,which in this case a symmetrical triangle (bullish) has established. One should add again as price approaches the bottom of the triangle and lighten up as price breaks out the triangle. A measured move would bring the spy to 109.50. You can lighten up 1 lot and adding back as price retests the breakout area. Lighten up on strength as price approaches your target.
If you are aggressive, you may try shorting the trend reversals to the intra-day resistances. But as I would be cautious because the trend has changed since yesterday's action and one should only stay long as price is above 108.50.
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