Buying the weakness and selling the strength

The S&P 500 Index (SPX – 1,093.67) was up 24 points, or 2.3%, though its intraday momentum was halted just shy of the 1100 region. As I mention yesterday, 1100 is the region divide the bull and bear. Once the resistance is cracked, bull will no doubt to regain power. And I don't think there is any difficulty consider the intensive upward momentum of the market right now.

The current resistance zone is from 1094-1113, which includes the 1094 200DEMA and the 1113 200DSMA. The SPX has made a series of lower lows and highs since the 1219.80 4/26 high, and is trading below both the 200DMA and the 50DMA, and the 50DMA are trading below the 200DMA and the 20DMA are trading below the 50DMA. That is what it call a Below-the-Line market, and not one where you can buy high and expect to sell higher.

Buying the weakness and selling the strength in concern with key price, supports, resistances, time and momentum strategy remains the most profitable way for traders to play the current market.

I don't have any open position right now, I missed the best opportunity to long this market when it hit the 50% fib retractment level at 1057 on Tuesday. As I mention earlier this is a below-the-line market, and we cannot buy high and expect to sell higher. If we miss the profit cushion from 1057 to 1083 at that day. It's risky to jump on board of the bulls camp. Meanwhile, If you want to short, it's not wise to short it right now consider the momentum is on bulls side. I think we have to wait at least 1130, and 1145-1150 will be more appropriate if you are patient enough.