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Market Update

Today the markets opened up on a stronger note than we’ve seen in recent price action pushing higher in the first hour of trading. We pretty much tested the breakdown level of last week around the 104.50-105.00 which is now holding as resistant in the SPY. I would expect this type of price action as the market do not trade straight up or down. As long as we are able to hold these levels as resistant and not traded back into the May/June trading range on the SPY, I feel comfortable that the higher probability trades are to the down side. I will look to short weak stocks on 15 min swing highs and will also look for foundation candlestick breakdowns on the hourly and 15 min charts to take advantage of intra-day inside previous day trends.

Even though the bias is to the short side I have seen some violent pullback in some stocks only to have them trade down creating lower lows and lower highs. Be attentive in scaling out (at least part of the position) into support level to help cut down on being shaken out of good trading idea; if you do get shaken out look to re-enter because trading idea might still be valid.

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