11/1: More about the market context / background

I will talk a little bit more about the market context / background today so to get a big picture we are facing now.

1. Big picture:  Since July 31, the market SPY is still in down-trend. It has gone through 3 waves of drops on 8/17, 10/3, 10/27 respectively.  If we knew this down-trend in July 31, the best strategy is to short when it bound the higher. But who knows. 

2. Is the market going to have the 4^th wave drop in Nov, i.e. below the low of 10/27?  It is possible, but nobody knows it either. Technically, SPY 395 to 400 base would be more solid than that on 10/27 (SPY around 410).

3. SPY 421 is technically so crucial for this rally attempt from 10/27 low, Yes, as it is the MA200. We would like to see it run above MA200 to assure a solid uptrend rally.

4. Looks like the big environment (FED rate will hold this month, bond rate hold, etc) support this rally from 10/27.  It is likely the SPY will close above 421 today, which will be a big victory for bull side.

5. Looking forwarding, this SPY rally will encounter big resistance at 424, 436, and then the tough challenge of filling the gap (435-439).

6. Timing and risk management are some of the key elements to keep you to survive in the volatile market.  Be flexible and Good luck.