Where And How To Go If The Market Holds

When the day's open price was broken along with S1, this was a good sign that prices could go even lower.

Note how the market tried to hold S1 before breaking lower and then made the same pattern when breaking under S2.

Above are 5-minute charts of Nasdaq100, Russel 2000, S&P500, and the Dow Jones. The symbols represent their ETFs.

Now that you’ve become a bit more familiar with Floor Trader Pivots, let's look at the four major indices to get the bigger market picture.

As you can see IWM, SPY, and DIA opened under S1 and then broke under S2 shortly after.

While using the FTPs isn't perfect, there are many great situations where you can watch specific levels to hold or break giving you a clear signal to enter or exit a trade.

Now, applying this to the indices for Tuesday, the SPY, DIA, and QQQs all closed under their 50-DMA and into unconfirmed caution phases.

The only one of the four indices that is still trading above the 50-DMA is the Russell 2000 IWM or small caps.

As the one holdout in a bullish phase (SPY QQQ DIA in caution phases), as we look to the FTPs tomorrow, a move above the FTP, particularly if the move also holds above today’s low, and we could see a turnaround Tuesday.

And as the one that is not only in the best phase but also saw recent institutional buying, small caps or the IWM over the pivots and prior day low, sets up as a low risk buy opportunity with a very clear risk should the pdl breakdown.

Any talk of an impending stimulus package could easily make Monday a one-day event, as we have seen so many times before. And now, with low risk should the market continue lower, you can get out and perhaps think about a short trade instead.

S&P 500 (SPY)  340 pivotal now as the 50-DMA as this is in an unconfirmed caution phase

Russell 2000 (IWM155 best underlying support at the 50-DMA

Dow (DIA) 280 the 50-DMA and now resistance to clear

Nasdaq (QQQ) 280 pivotal resistance with this in an unconfirmed caution phase

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