June 15 2022 - Post FOMC ES/SPY Analysis
Last post had 2 targets reached and the 2021 VWAP with black trend line held extremely well seeing a nice fake breakdown below it.
Post-FOMC as usual sees an exciting rally to the upside. In general, things are quite oversold as evidenced by a daily RSI(5) in the 14s. Despite the news, chart suggests at least a short term bounce. The current daily candles are in balance indicating a consolidation period may occur. Medium to long term still bearish.
Bull Targets
Narrative
Bear Targets
Post-FOMC as usual sees an exciting rally to the upside. In general, things are quite oversold as evidenced by a daily RSI(5) in the 14s. Despite the news, chart suggests at least a short term bounce. The current daily candles are in balance indicating a consolidation period may occur. Medium to long term still bearish.
Bull Targets
- Target 1:3865
- Target 2: 3877.25-3896.50 (first gap fill around 3885)
- Target 3: 3959.50-4014.75 (second gap fill around 3980s)
Narrative
- Target 1 is simply the purple trendline above noting that the 5 EMA was touched and rejected initially at around 3830s, and the 9EMA is at 3890. So target 1 is approximately in between them.
- Target 2 is the more obvious and likely target. It is the weekly gap down on June 13. The specific ranges are above, but if this rally is to have any legs it needs to close this gap. If this gap cannot be fully closed (e.g. traded within that entire range listed), we are heading way lower. Personally, I think there is a high likelihood of closing this gap.
- Target 3 is actually a gap seen on the RTH (regular trading hours). Flip to a 4h chart and select RTH at the bottom right and you will see a large daily gap. This can be easily visualized on a SPY or SPX chart, the ranges is listed above. This gap is less likely to be closed but the lower range may possibly be tested, I would expect a difficult time getting past 3980 which is the green trend line and corresponding 20 EMA (currently at 3972). If time permits, then orange trend line has kept all upside in check and would be a strong resistance.
- As a general rule, if these upside gaps are not filled, it is exceptionally bearish.
Bear Targets
- Target 1:3710-3720, basically retesting the recent low at 3708.50
- Target 2: 3640 (horizontal resistance)
- Target 3: 3500-3540, zone encompassing the 2020 VWAP at 3540s and green trend line at
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