Today was a bearish day as I think mostly everyone had expected. I had two trades going today; VMW and BBBY, both of which I entered on 6/4. I was short on both. VMW cooperated with me and I ended up making a 10% return. Not too bad!
BBBY, however, was a bit of a different story. BBBY got upgraded this morning which caused it to be up over $0.80 in pre-market. Now, I know, that is a fundamental reason for the stock to go up. However, looking at the moving averages on BBBY, it was very clear that we did not get a close below the 50 EMA. For me, this is the technical explanation as to why we bounced today. That being said, I am still holding on to my position (it was only 1 option contract, so it wasn’t very expensive) and I am going to keep my stop where it is @ 69.15.
Now let’s talk about tomorrow for a moment. The SPY is at an interesting point. There are a number of things it could do (as seen in the chart below. Firstly, we have 3 support levels. They are the 50 EMA, the bottom trend line and then a support line. There is a good chance we could bounce tomorrow or Friday. But if we do bounce, we have to contend with this minor trend line that is acting as resistance. We can always move sideways, but at some point we are going to break in one direction or another. If we break below support, the bear move is one. If we hold and break above resistance, then the rally may be back in town. Only time will tell!
StocksNca$h 