The Rally is Real, SPY may gap fill before push to yearly high.
Updated
Based on how bullish this week has been, the RSI climbing to a high for the past few months and the McLellan really outperforming the previous 2 bounces, I feel that this bottom is the real deal and SPY has officially turned bullish.
Unlike before where rejection at resistance brought us to lower lows, we should theoretically form a higher low when we pull back from this rally.
This week was of extreme greed and a short squeezy nature, we had back-to-back gap ups which is incredibly bullish, but can create an opportunity for a pullback.
I think bears have a good shot at shorting here and I would like to see the resistance zone push us back down to the 422-420 area, from here I think we can form the inverse head and shoulders and ride out the year to the 450s or 460s.
2024 may be a different story, as yield un-inversion can telegraph a recession, but we aren't there yet, for now expect dips to be met with buy demand, it is likely that interest rates are not going to be raised again and the market knows it.
Unlike before where rejection at resistance brought us to lower lows, we should theoretically form a higher low when we pull back from this rally.
This week was of extreme greed and a short squeezy nature, we had back-to-back gap ups which is incredibly bullish, but can create an opportunity for a pullback.
I think bears have a good shot at shorting here and I would like to see the resistance zone push us back down to the 422-420 area, from here I think we can form the inverse head and shoulders and ride out the year to the 450s or 460s.
2024 may be a different story, as yield un-inversion can telegraph a recession, but we aren't there yet, for now expect dips to be met with buy demand, it is likely that interest rates are not going to be raised again and the market knows it.
Note
Just an update, I have seen a lot of great calls out of Cramer so I wanted to quote him."We will not be oversold next week like we were when we came in on Monday, so I don't expect the kind of strength we had this week, so if you have some positions you don't like its time to do (Sell Sell Sell) Get me?"
That combined with J-Powell speaking on Wednesday & Thursday makes me think that we may end up retesting the prior time we heard J-Powell speak, and we may do it this week. That would mean a faster turn rather than the chop that I illustrated in the chart prior to retrace. We could start the pull back on Monday itself and hit the 420s next week.
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