Stocks in play and SPY

[Teruki 21]

Hi there,

I noticed a lot of stocks that are supposed to be "in play" mimicked the movements of SPY the last couple of days. I have learned that some stocks in the gappers' list are there just because SPY has gapped and not really in play, but that being said I noticed the ones that gapped up while SPY gapped down (and vice versa) started to mimic SPY sometime in the day or get affected by it. 

I think Andrew mentioned in one of the videos in the education center that we don't have to worry about SPY's movements too much if the stock is in play, but he often says in the chatroom something like "Why is this stock going down...Oh SPY is losing it that's why." etc.  As a beginner, I don't know what to do when I notice many of the stocks in my watch list start to mimic SPY or obviously be affected by it.

Also, I wonder if SPY moves like an individual stock. If so, If I see a stock that is mimicking SPY starting to form a pattern (ABCD, VWAP reversal, etc) then I could just ignore the fact it is mimicking SPY because the probability of forming the pattern is the same. But if SPY moves somewhat more random, then I cannot trust it. Hope you understand what I am trying to ask here... 

In the above case, the stock is mimicking SPY, but sometimes a stock looks like in play and moving individually but all of a sudden drops or goes up higher because of SPY. It is more difficult to deal with. For example, the stock is starting to make an ABCD pattern but drops down all of a sudden and I notice SPY dropping....  

Any advice regarding this would be appreciated.

Thank you!   

[Justin 264]

3 hours ago, Teruki said:

he often says in the chatroom something like "Why is this stock going down...Oh SPY is losing it that's why." etc.  As a beginner, I don't know what to do when I notice many of the stocks in my watch list start to mimic SPY or obviously be affected by it.

Yeah, with the market we're currently in, I've personally noticed a lot more stocks following the SPY. I think with all the indecision and fear, it will push stocks to follow it or their industry very closely. It'll definitely limit my watch list, but I still like to stay clear of stocks trading with the SPY.

I'll let someone else chime in about if the SPY is moving "can we still trade patterns against it and other stocks moving with it?". Only because I don't do much pattern trading; I do a lot of ORBs and momentum scalping.