After a 9-day consolidation, the markets finally broke out of the range on Thursday with a big flush to the downside.
After testing support near the recent lows on Friday, the big question next week is whether or not the market bounces off support or if support breaks for a further flush to the downside.
Keep in mind that next Friday, June 17th is a big options expiration. There are a record amount of expirations set to expire Friday afternoon.
Any time we head into a big expiration event, there is potential for wild back-and-forth action. With this volatility comes the opportunity for great day trades.
Be prepared to focus on lower time frame setups early next week. Volatility and the daily expiration on S&P 500 (SPX) options can make for great daily “income” trades.
On the swing side, we need to see how next week unfolds into Friday’s expiration to understand the next direction better.
As long as the indices are trading under the daily 21 exponential moving average (EMA), our primary focus will be on shorting any bounce in the downtrends. For bullish setups, we still like XLE, OXY, UNG, and a few others that we’ll cover in the Sunday video.
Markets like these are far from dull. While they aren’t “easy,” they still offer opportunities if we focus on the right things. Shorting bounces in bearish structure (red Big 3 bars) and buying the dips in bullish structure (green Big 3 bars) is a strategy that has withstood the test of time. That will continue to be our focus in this wild market. We’ll look for clean setups using our Big 3 indicator on Monday in the Compounding Growth Mastery together.
Stay Focused!