Today looked it was going to shape up to be an average day, I think most traders felt that after Homed Depot exceeded estimates that we were going to get a average up day, but its the Fiscal Cliff that is hanging over the market. Despite the market being down today I think with the oversold conditions in the market we can expect a rally into the Thanksgiving Holiday. But I do not believe this is a bottom. Even though the SPY has retraced to the 50% fib level that some may consider a good support level.
This is a temporary stay in my estimation unless there is some major advancement in the negotiations in congress on the fiscal cliff. My target for me moving into bearish trades is $140.50 on the SPY with some reversal at that point. I believe the downside target once the SPY begins to move that way could be about $135.50. I think being patient in this environment is the key to finding a good trade.
Happy Trading
