The question Robert Roy keeps hearing, in his WealthBuilders sessions and at family gatherings, is what to do about the S&P 500 now: buy more, sell, protect, or step aside? In episode 32 he answers it with a chart, and with some advice about what traders should expect from any move. He starts with the memory of the spring decline. Rob had projected that a 10% correction would reach about 6,302. The low came in near 6,317, within 15 points. Since then the index has rallied about 1,100 points, from roughly 6,300 to 7,400, mostly in strong straight-line moves. He compares the brief pauses to a marathon runner catching their breath before setting off again. A Fibonacci level, a moving average, a breakout, a retest and a bounce all lined up, and the market went on to new highs. From there he gets philosophical. In thousands of trades, Rob says he has bought the exact low and sold the exact high only once, and it was “pure blind luck.” He doesn’t try to “harvest the field to the edges.” He uses a hamburger analogy: skip the bun at both ends and eat the meat in the middle. He buys above support, not at it, and targets just below the next resistance. On the options side he avoids cheap 5–30 delta lottery tickets. He tells a story from his bowling days: his father told him to stop going for strikes and aim to knock down nine pins, then pick up the spare. Do that every frame and you score about 190, well above Rob’s average of around 160 at the time. Then he covers market structure. A swing high is a high, a higher high and then a lower high, and a swing low is the reverse. Both must be judged on closing prices, not intraday moves, because late-day news can reverse everything. The recent swing low is slightly lower than the last one, so a lower swing high may be forming. If it closes that way, it’s a warning sign. Is the rally sustainable? Rob thinks so, but he doesn’t want a straight-line run. Healthy markets climb like a staircase: two steps forward, one step back, with the up-moves larger than the pullbacks. He’d like a pullback to about 7,260, where a moving average, an ABC Fibonacci level and a pivot area meet. He believes another 5–10% correction is building. Taking 10% off the 52-week high of 7,517.12 gives a new correction level of about 6,765. That’s the same level the index gapped to and bounced from on earlier good news, and Rob would buy a bounce there. He also points to concentration. The ten largest S&P 500 companies, led by Nvidia, make up about 38% of the index. If you want to know whether the market will hold up, he says, start by watching those ten stocks. His Fibonacci upside targets are 7,560 first and then 7,877. He reminds viewers that Fibonacci and support/resistance levels are guides, not lines price must touch exactly. Rob also describes his routine. He trades mostly until about 11:00–11:30 a.m. and doesn’t trade every day. If he doesn’t like what he sees, he sits out. Key takeaways: – Sustainable rallies move in steps; a pullback toward 7,260 would be healthy. – The new 10% correction level from the 52-week high is about 6,765. – Judge swing highs and lows on closes, not intraday moves. – Don’t chase the exact top or bottom; take the middle of the move. Options involve risk. This episode is educational and not a recommendation. |
