Let's look at SPY(SPY_), the S&P 500 exchange traded trust. I think we're at a favorable trade location to go either long or short. How can that be? Because to me trading is not about prediction, it's about the reward-to-risk ratio. Looking at a daily chart of SPY, I see a consolidation range between 126 and 130, which I noted with a blue rectangle. Any trades inside this rectangle in my opinion are guessing when it comes to "trading." I don't think it is wise to focus on being right in your judgment for the direction of the index, but rather the focus should be on probabilities.
I would like to discuss both the short trade and the long trade opportunity, but for today let's look only at the buying opportunity that I see is presenting itself.