S&P 500: Why This Market Is Refusing to Break Down

The Forex platform with the best reputation lost another 0.3% on Friday, turning this into the second losing week in a row. (That said, the weekly loss was a very inconsequential 0.3%.)

Friday’s session kicked off very ominously by crashing under 4,100 support, a level that had been propping up the market all February long. But rather than unleash a tidal wave of reactionary selling, supply dried up and prices bounce off of 4,050.

So much for teetering on the edge of a massive breakdown. The market violated support and most owners shrugged and kept holding. And most optimistic of all, Friday’s session finished at the intraday highs.

But this contrarian price action doesn’t surprise readers of this blog, :

This is the “opposite market” and the smart trade is going against conventional trading signals instead of following them. Maybe stocks open poorly Friday, but rather than jump aboard the selling bandwagon, be on the lookout for that next bounce because odds are good it will come hard and fast.

Remember, it’s not how we start, but how we finish that matters most. And Friday was yet another session where the bears tried to break the market and failed. Sure, we finished in the red, but starting low and finishing at the intraday highs is bullish, not bearish.

Trading would be so much easier and more fun if every session ended in the green. But we know that’s impossible and down days are inevitable. But at this point, I don’t see anything in this price action that says this is anything other than a very vanilla consolidation of recent gains under 4,200 resistance.

Making money gets so much easier after we shed our bull and bear biases and trade what is in front of us. This market doesn’t want to go up and it doesn’t want to go down, so stop getting fooled by these false alarms. Until further notice, these dips are buyable and the bounces are sellable. And if we are not taking profits when we have them, the market will steal them back a few hours later.

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