Markets Bounce Back: Understand If Markets Will Go Higher Or Fall

After Wednesday's sharp Federal Reserve triggered fall, the markets are bouncing back today. Yesterday, Fed Chairman Janet Yellen said interest rates may start to rise in approximately one year. This spooked the markets as the Dow Jones Industrial Average tumbled 200 points from its highs. Today, the markets are recovering a majority of that dip. Investors and traders are wondering whether or not the markets are headed dramatically higher or if they are getting ready to dump again.

I will explain how to see this perfectly.

All you need to do is follow the chart from yesterday. Take the high on the SPY just before the FOMC Statement. That level was $187.90. The low was $185.50. As long as the market remains in this range you should have a neutral bias. If the markets break above the high on the SPY of $187.90, a bullish bias should be taken as the markets will likely trade higher in the coming days. Should the markets take out the lows of $185.50, a very bearish stance should be taken as the markets are likely headed much lower and quickly.

This is a simple way to read the charts. Keep it simple and stop using all the nonsense like MACD, RSI and more. Just follow the price action. To get more information, trade alerts and daily educational videos, take the seven day free trial to the Research Center. Join today and profit for life.

Gareth Soloway
InTheMoneyStocks.com