Today we looked at the SPY sell off that came about early in the morning just to hit my SPY 38.2% retrace target at 101.2 or so. That 38.2% retrace is also a 61.8% retrace from the July 2009 lows to the highs.

As soon as we hit 101.2, we knew there was going to be a momentum shift in the market. We believes the bears have done enough damage to be satisfied and willing to let the bulls get trapped as they try and retest the Head and Shoulders neckline on the SPY. The bulls will most likely break the 102.88 level (or 23.6% retrace since the start of the sell off the day before monday’s gap). They are likely to reach 103.88 and 104.70 and could reverse right around 104.70 after the restest of the H&S formation.

Today we bought also some GOOG calls as the GOOG hit the 50% retrace. We also look at GS, GE and AMZN (which retested 111 right at the end of the day).