My General view of SPY
- In my philosophical view, humans tend to always need an "answer" for everything in life. Historically we created gods to explain the unexplainable. That's not to say that i am an atheist in my religious view, nor am i trying to make this a religious discussion, I'm purely commenting on human nature. We are a curious species and we learned to not take "no" or "i don't know" as an answer from a very early age of our ancestry.
- If you look around you, it feels we "must" have an answer for everything in life, including the unexplainable (consciousness). Scientific people call it "coincidence", religious people call it a "miracle from god". To advance in our life we need to see these two groups of people from a third persons perspective, and understand both sides. It doesn't always have to be black or white, right or wrong. It's okay "not to know", as long as you are the path to enlightenment through spiritual or scientific, that's all that matters.
- I am only a man, born into this world trying to make sense of something insensible for my time.
- So why is my philosophical view important in the way that I trade? I see many traders nowadays pointing to the news as an "answer" for their directional bias in the markets. Trump said this, trump said that, markets go up, markets go down. The media business sells you the answers, and you buy them because its encoded in our ancestral genes to buy them. To reach a new level of consciousness, you would need to understand the words. " I am only a man, and too stupid of a species to understand anything but." We are a mere spec in the timeline of "(life?)".
- My thesis is based purely on objective data with a technical analysis standpoint (sometimes with the exception of federal news.)
- Before trying to understand the way that i trade, you would need to understand my philosophical standpoint, and to also assume that nowadays, there is a gap between the real economy and the stock market. The stock market ≠(does not equal) the economy. You would also need to understand the options market and that algorithms created by market makers are always trying to stay delta neutral hedging their positions. And finally the last thing you must understand is intermarket analysis to fully understand my trading view.
- So if we can all come to the agreement that we are trading against algorithms, we could also say that we are trading against logic. In this case it is MUCH easier to trade against logic than against emotional traders because every move in the market is based on a formula instead of being based on a opinionated rational/irrational decision to sell or buy. Do I know the formula? No I don't, and that's okay. What i do know, is the results of the formula at work. Sometimes its easy to spot when live trading, sometimes it can only be spot with hindsight bias, sometimes the answer is never found, AND THATS O.K.
- For example, i don't see where or why "2+2" is happening, but i keep seeing "4" as the answer.
- So if we can all come to the agreement that we are trading against algorithms, we could also say that we are trading against logic. In this case it is MUCH easier to trade against logic than against emotional traders because every move in the market is based on a formula instead of being based on a opinion based rational/irrational decision to sell or buy.
TL;DR We are not trading based off psychology any longer, we are trading based off logic. (algorithms & formulas) My thesis is based purely on objective data with a technical standpoint (with the exception of federal news.)
SPYMultiple resistances/support areas for the S&P.
We have always respected the white resistance since the 2008 financial crisis. The solid green line in the middle is what i consider the "goldilocks" zone. A habitable zone in which "fair price" has been achieved in the context of the uptrend we are seeing since the 2008 financial crisis.
In conclusion, to not make my first post too long i will write some pointers in how i trade.
- I trade Spx products vs volatility
- I trade Spx products vs forex
- I trade Spx products vs bonds
- I trade Spx products vs commodities
- I trade Spx products logically ( I heavily disagree with EWT methodology)
- I trade Spx products using intermarket relationships
- I use historical resistance/supports in all markets to gauge activity in what i'm trading.
As time goes on i will post many charts of what i wrote above, and too make things less confusing i will explain as i go.
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