The 400, 24 Feb 2023
🖼 Daily Technical Picture 📈
➤ Equities were all over the place on Thursday trade. Starting higher, dipping lower before moving back up to where it all pretty much started.
That is "The 400".
➤ 400 is the key round number level of the S&P500 Index (SPY) or 4,000 for the SPX500. Price tends to get drawn to and then gyrate around these round numbers like a moth to a flame. Not to be outdone, there is also the 200-day moving average in the midst.
➤ What's significant about the round numbers like 100, 1,000 or 30,000? Nothing in particular. It's just that "human" psychology finds them "favourable" or "comforting" or "satisifying" perhaps? It's certainly more appetising than a number like 30,627. Obviously, algos and bots also try to exploit these conditions, hence the back and forth we usually see.
➤ I took the exit signal to get out of my short position. Does it mean prices may bounce higher? It's certainly possible but I don't have a high conviction view. I'm going to sit it out for now until the next favourable opportunity hopefully very soon.
➤ Conclusion: Happy to be counting my profits until the next trade.
➤ Equities were all over the place on Thursday trade. Starting higher, dipping lower before moving back up to where it all pretty much started.
That is "The 400".
➤ 400 is the key round number level of the S&P500 Index (SPY) or 4,000 for the SPX500. Price tends to get drawn to and then gyrate around these round numbers like a moth to a flame. Not to be outdone, there is also the 200-day moving average in the midst.
➤ What's significant about the round numbers like 100, 1,000 or 30,000? Nothing in particular. It's just that "human" psychology finds them "favourable" or "comforting" or "satisifying" perhaps? It's certainly more appetising than a number like 30,627. Obviously, algos and bots also try to exploit these conditions, hence the back and forth we usually see.
➤ I took the exit signal to get out of my short position. Does it mean prices may bounce higher? It's certainly possible but I don't have a high conviction view. I'm going to sit it out for now until the next favourable opportunity hopefully very soon.
➤ Conclusion: Happy to be counting my profits until the next trade.
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✅ Copy My Trades @ eToro, etoro.com/people/mrstocky
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Not Investment Advice
✅ Copy My Trades @ eToro, etoro.com/people/mrstocky
✅ Verified Track Record 📈
Not Investment Advice
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