Lots of Support Lingering

I have been beating the drum of patience and caution recently. Today I am keeping an open mind and just looking at some prominent names from our watchlists and portfolios that are currently sitting on what appear to be major support levels.

UNP

UNH

FANG

JPM

FIBK

HD

QLYS

AER

ILMN

TWTR

ALRM

FFIV

GWPH

M

JAZZ

GBCI

CIEN

These patterns can go one of two ways: Either we see support hold and this could be a tremendous buying opportunity OR support fails and in that case many of these look like massive topping formations.

With the size of correction many of these names have seen recently there is likely a strong relief rally ahead. Using this support as the basis of that thesis could prove a strong risk/reward.  

I am a big believer that we don't need to be the first ones in on a move to make money. There is very little reason to shoot from the hip trying to catch a low that we "hope" holds. Instead I prefer to watch the price action, identify key levels of interest, and wait for confirmation.

If prices can hold this support we will likely see new rotation patterns trigger that we can trade for a pop. If prices fail these levels then it is likely we are headed for a more serious downtrending market. Some big names have already failed key supports, most notably Semiconductors as a group (SMH). We will want to see the remaining support levels above hold if the Bulls want to push for a year end rally.

Keep these levels in mind and trade what is actually happening in front of us rather than what we want to "think" should happen. Be ready for either outcome from here and keep an open mind.