In looking at the one hour chart the SPY is currently a buy. Price is currently at $266.86. I have a target of $274.00. If there is any weakness to the SPY before $274.00 is hit then it is a buying opportunity.
1 Hour vs Daily Chart
Normally when I trade I look at the daily charts. For shorter term trades I have been looking closer at the 1 hour chart. One thing I am noticing with the daily charts is that the 38% Fib retracement level acts as a major support/resistance area. In the past I had moved my exits from the 50% fib retracement to the 38% for shorts: https://evancarthey.com/moving-the-short-exit-to-the-38-fibonacci-level-from-the-50-for-my-fib-extension-trade/.
For the 1 hour chart the 50% Fib retracement level seems to be the best exit level just like in almost everything else. From futures, forex, and the 1 hour stock charts the 50% Fib retracement level is king. For the daily stock charts I am beginning to think that the 38% Fib retracement level is king. I will need to do more testing to see if this holds true. The 50% does work but I’ve seen the 38% get hit numerous times and then a big move continuing in the major trend before the 50% was hit. It is something for me to look at much closer and re-evaluate like I am always doing with my trading style.
SPY 1 Hour Chart
Here you can see the top of the gray box is the 50% Fib retracement level. My exit would be just below the top of the gray box around $274.00. If price goes lower before hitting $274 then the long is still in play. Then you can get in at an even better price. Should price break the previous swing low at $254.59 before hitting $274 then I will need to adjust the exit down accordingly to how low price moves. Price broke the teal line but still has not hit the 50% retracement level so the long move is still in play. The magenta lines are support lines from moves on the daily chart. The dark blue line is a former support line that has now turn into resistance. The short term play is to the upside.
My NO Hedge Prediction
If I was making this trade I would be long and exit at $274.00. Should price goes lower before hitting $274 then the long is still in play. Then you can get in at an even better price. If price breaks the previous swing low at $254.59 before hitting $274 then I will need to adjust the exit down accordingly to how low price moves. But needless to say I predict the short term move is to the upside.
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