With the Dow closing below the psychologically important 7,000 level investors are desperate for a trade. Jeff Macke has one.
“The tactic is to be quick,” says FM trader Jeff Macke to Dylan Ratigan on CNBC's Closing Bell.
And he also says ignore the Dow. "We’ve now broken the technically important level of 740 on the S&P 500 .” That was a level that Macke was betting the market would hold – as a point of support.
Now that the S&P is trading below 740 “Take a step back and look at that 740 level not as support but now as resistance.”
In other words, whereas the market would often bounce off that 740 level and climb higher – now Macke thinks it will work in reverse.
What's the trade?
"We will probably get a rally over the next couple weeks that will look and feel exciting but it will probably run out of steam.” In other words right around that 740 level the market should change direction– at least on a technical basis.
Go into your trades using that as an exit strategy and "use that an opportunity to take profits,” says Macke.