Hey Traders,
Let’s talk about something that trips up even the smartest traders…
Hope.
Hope can be helpful in life — but in trading? It’s dangerous. Especially in markets like this one.
Yesterday, SPY closed strong — even popped above its 20-day moving average.
But take a look at what’s happening today: a little up, a little down, and as I write this, we’re sitting right around where we started the day.
And looking over at the QQQ? It actually touched its 50-day moving average this morning… before retreating.
Meanwhile, DIA hasn’t even closed back above the 20-day yet.
I’ve been warning you about this for weeks.
Back a few weeks ago, during one of these “fake rallies”, I told you that one of the most dangerous things in trading is a bullish-looking move inside a bearish market.
And yesterday, I reminded you: even when we get a break above the 20-day, that doesn’t mean we’re bullish yet.
Don’t let hope blind you.
People have gotten so used to watching the market drop… that every little rally feels like a rescue.
But all I see in the SPY chart right now are four failed rallies in the last two months.
The trendlines tell the real story.
We’ve still got heavy resistance from above — the 50-day and 200-day moving averages are still pressing down.
And while it might sound encouraging to say, “Well, at least SPY and QQQ are above their 20-day,” let’s be real…
It’s taken the better part of two months just to get that far.
At this pace, by the time we see prices crawl above the 50 and 200 day moving averages, we might not see a truly bullish setup until we’re most of the way through summer… if we’re lucky.
Don’t get me wrong — I want the market to go up.
But I’m not going to trade like it’s already happened.
That’s why I use a market-driven approach.
I don’t decide what strategy to use based on what I wish the market would do.
I look at what it is doing and trade accordingly.
And right now the stack is still inverted. The ceiling overhead is still there. And buyers have not shown up with conviction.
So what am I doing?
Same as always:
- Selling premium
- Letting the bounce come to me
- Playing short-term, high-probability setups
Because until we get all three indexes back above the 50-day and 200-day with real momentum, I’m not chasing anything.
Don’t let hope blind you.
Take the emotion out of it.
Stick to the chart.
And remember: your biggest edge in the market isn’t guessing what comes next.
It’s reacting smartly to what’s already happening.
Trade well,
Jack Carter
P.S. I’m revealing the one stock that Wall Street is “betting on bombing” — get the stock and details here!
