Yesterday we investors saw something we haven’t experienced in quite some time. We saw a lot of ‘red’ flash across our screens. To be clear, the SPY had a pull back to the tune of 1.2%.
And while seeing your positions (if you’re long) lose value isn’t a good feeling at all; pullbacks and consolidations are all healthy behaviors for the overall stock market. Not to throw in a cliché here but like they say; “stocks don’t go up in a straight line” and neither does the broader market.
Pullbacks, in essence, are a part of the course.
Pullbacks also represent opportunities to finally get into that trade that got away from you.
How Will the Short Me Tina Community Position themselves?
A couple of things. First, this pullback has presented a handful of new ‘long’ opportunities; so that’s a good thing.
Secondly; I don’t believe today is the day to jump head in, into any long positions and three; it’s really just the time to be patient and see how the overall market reacts at these levels.
We aren’t in a bear market; so I am not inclined to run out and put on a bunch of short positions either.
Simplify This With Bullet Points for Me:
Look Below For a Recap of the SPY
A few weeks ago; I signaled a warning on a potential pullback when the SPY hit the 240 levels. I followed up in another blog and indicated 232-233 are good levels to pull back to and 226-228 represent the best levels for consolidation (IMO).
At 233, we are sitting on support. The best thing for us at this point; is for the SPY to consolidate on any of the above levels of support.
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Tina Lashley holds a Bachelor of Arts in Forensic Psychology and a Master's of Science in Mental Health Counseling and has been a stock market participant for over a decade. Currently a Full-Time Trader and Blogger of all things financial.