Update and a Quick Lesson

Traders love to call support at exact levels like $109.33. The fact is this, support and resistance are zones or areas and that is because of they way they are formed. Remember me saying a correctly read chart will show you human emotion, fear and greed-the two siblings that move markets. Quickly imagine that you have bought the SPY on the way up at $111.45 and now today, it's down below that level. LEts assume you even went in heavily leveraged and even used you kids college money on the trade. Right now, you are at a loss and you are feeling really bad about it, but you don't take the loss when it's rather manageable, instead you say, "I'll sell this position when it gets to my entry price". THAT IS HUMAN EMOTION, the reason is, A) you don't want to take a loss. We've been taught ever since we first walked into a class room with our lunch box, that 60 or 65 is an "F" a failing grade. Therefore we expect to perform in the passing grade level when we trade, we want to see 70 or 80% of our trades succeed, IT IS SIMPLY THE WAY YOU HAVE BEEN CONDITIONED YOUR ENTIRE LIFE. It's not reasonable to believe someone can make 80% of their trades correct, consistently. Instead, think about it in baseball terms, a 300 or even better a 400 batting average can put you in the hall of fame, but that means you only hit the ball 40% of the time, the way we look at the world, that's a failing grade, except in baseball-that's an amazing average. This is how you need to look at the market and risk management will allow you to be wrong more then you're right and still make a pile of cash.

Back to resistance....

So we wait for the stock to come back close to our levels because we don't want the loss and we have an attitude of "I lost it here, I'm going to make it back here". So when prices move close to your level and maybe start to vacillate a little, you get nervous and you sell, maybe for a percent less then what you bought it for-the crowd will do the same thing, therefore your selling creates resistance or supply and keeps prices from moving higher, unless demand overwhelms supply. That is why resistance is at an area, not an exact level-same with support.

Now looking at the chart we see volume pick up a little bit, nit huge so this wasn't a strong zone of support and can and is being broken on a bounce. $111 is the area that will provide support and is the level we want to see broken on big volume.

As for right now....
I warned a bounce was building, here's a look at it now.

Here's the 1 min 3C that called the bounce last update, it looks strong still, but the long term 3C in blue at the bottom is not following prices.

Here's the 5-min 3C chart (stronger signals then the 1 min chart) and it is showing the move stall out, blue 3C looks even worse. As of right now, I don't see this as a threat. i'll let you know if anything changes, but it can be used to get better positioning on any shrorts you might want.