SPY: Where do we go from here?
We had two consecutive red weeks in the SPY but the uptrend is still intact( barely). There are two scenarios for SPY- > Hold the trendline by successfully defending the 378 /373 level this week to resume the uptrend. A break above ATH will lead to a test of 400, 410 and if large caps can join the party, 420 is also possible. 2) Outflows among major large-cap tech names is a clear indication of weakness/profit-taking and normally this would result in an overall market drawdown but some of the money is flowing into value names and hence we are witnessing overall choppiness in the broader market. That said, if SPY loses 373, we will break the trend and can see a quick correction to 368, 360, and 350. VIX and the bond market have been giving us warning signs on a much larger correction so it is definitely crucial for us traders to keep an eye on the broader market and not lose sight of the bigger picture. There will always be opportunities in a few isolated names throughout this month and am looking forward to capitalizing on these moves whether it is to the upside or downside. The above ideas are my own and should not be treated as investment advice of any kind.
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