For the past few weeks, I have been on the lookout for the market to correct towards its' 200-day moving average. Distribution came into the market and stocks began to break down hard last week. Now, we are starting to see stock bounce near key support levels. Let's highlight some recent action so we can gauge market conditions.
I added to my position in SPY today as it found support near its' 200-day moving average. While I still think the market may go lower or at least bounce around into October, I thought this was a logical place to add given the risk / reward opportunity at this point. I decided to use a slightly wider stop than I normally would to account for the likelihood of increased volatility.
Bitcoin is currently trading below its' 200-day moving average, but has found consistent support near its' 40-week line over the past few months. BTCUSD is currently high on my watchlist, as I'm looking to add more to my position as buying opportunities arise.
AAPL and MNDY are both near their 200-day moving averages as well. I am keeping them on my watchlist for potential buys. MNDY looks especially captivating to me because of its' strong fundamentals, but I would prefer to buy it at higher levels as I believe it may need to clear out some of its' overhead supply from 2022. AAPL is also on my watchlist, but I feel it may need some more time to base out and like MNDY, I would feel comfortable buying it at higher levels after some additional consolidation. While it may seem odd that I don't care about buying at higher levels, my thought process is simple: I can easily see the market getting very choppy and volatile over the next few weeks. Because of this, I don't want to get too aggressive too quickly. That is why I look to dip my toes back into the market slowly and with an ETF like SPY first before branching out to other names. The key is to keep an open mind, and to never tune out the market completely. Remember, conditions can change on a dime and those who are not prepared for the next uptrend will surely miss out.
Risk right. Sit tight.
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Full Disclosure: I currently own SPY and Bitcoin.
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