One thing I learned early in my trading career is that when the market changes, you need to adapt.
That’s why I’m constantly monitoring my strategies, and tweaking things as need be.
The strategies that work in a bull market might not work in a bear market…
And the trades that work in a fast market might not in a slow one.
That’s the nature of the beast.
Check this out:
Between January and May of 2019, I made $77,000 in profits. Here’s the proof…
Source: Profit.ly
But during that same period in 2020 … whew! That was a volatile year.
Source: Profit.ly
This brings me to my main point…
The market is on edge right now.
And one of the main U.S. market indexes, The S&P 500 ETF Trust (NYSE: SPY), is creeping toward a key level that could change my strategy.
Keep reading …
Important Trading Tool
Traders use technical analysis to identify patterns in the market. One of the top tools in charting is identifying support and resistance lines
If you don’t know what those are … don’t worry. It’s a pretty simple concept.
My mentor Tim Sykes explains it really well in this video …
When stocks fall through support, it’s a bearish sign.
Right now, the SPY is creeping toward a major support line.
There are a lot of factors that drove SPY lower this year. Most recently, the Fed’s decision to raise interest rates is taking a pretty big toll.
Here’s a chart of the SPY the morning after the news broke …
SPY chart 1-day, 1-minute candles (Source: StocksToTrade.com)
As you can see, the price action’s been pretty ugly.
But to get the full picture, we’ve gotta zoom out.
Watch Out for This Level
Remember that I said the SPY is moving towards a big support line?
Look at this chart and see if you can spot the support level:
SPY 1-year, 1-day candles (Source: StocksToTrade)
If SPY falls below $400, that’s a bearish sign.
If I get confirmation of this move, I’m gonna change my strategy.
I’ve been telling my students about this in class and on our live streams.
During sketchier markets, it’s important to tighten risk and size down.
I can’t stress that enough.
If you want to learn more…
Join us for a live stream next week.
Oh, and another thing! This is really exciting…
Tim Sykes and I are going on tour to hold live and in-person trading conferences.
All the information is right here.
Come and ask us your questions in person. And watch us trade right before your eyes! I’m really excited about this learning opportunity.
Get in on the action to get better,
Roland Wolf
Editor, The Wolf’s Den
P.S. My mentor Tim Sykes and I have decided to team up for a special in-person live training tour. Click here for the cities and dates.
