The 
SPY sell-off this week might be scary, and here we want to go back to the old-fashioned three-time frame concept. It works as a good road navigation. Additionally, I added the data from aaii.com/sentiment-survey to show how bearish sentiment prevails now to give us a short-term hope. The bearish sentiment at its extreme zone (twice higher vs average) gives a clue that the local bottom is near, and not acting as a trading signal
On the charts, we seeSPY on a monthly, weekly, and daily basis.
More noise is on a daily basis, so I want to keep an eye on the weeklies to help choose the strategy, even for intraday trading. A monthly time frame helps to add gears of consciousness (ATH, 3 bar swing formed).
Blue lines form the channel, which is the Keltner Channel. It shows the tunnel of extremes as well. This means that if we reach the lower band, we may dance there for a while, and then it will bounce.
Hypothetically, if we enter the bearish market, we need to see the lower low and the lower highs at least on the weeklies. For me it will tell that all bounces will be shorter (~ Fib. 0.382) and sharper, and I will adjust my expectations.
Coming back to the current situation on weeklies, I see we are on a bullish trend. On dailies, obviously in a downtrend and near its local bottom. We closed the old gap, so the next potential magnet is ~575-ish support. To confirm a bounce start we want to see at least 3 bar reversal, a ka lower low formed and follow through. The sentiment brightness might be sticky, so no promises.
Stay profitable!
Cheers!
SPY sell-off this week might be scary, and here we want to go back to the old-fashioned three-time frame concept. It works as a good road navigation. Additionally, I added the data from aaii.com/sentiment-survey to show how bearish sentiment prevails now to give us a short-term hope. The bearish sentiment at its extreme zone (twice higher vs average) gives a clue that the local bottom is near, and not acting as a trading signal On the charts, we see
SPY on a monthly, weekly, and daily basis. More noise is on a daily basis, so I want to keep an eye on the weeklies to help choose the strategy, even for intraday trading. A monthly time frame helps to add gears of consciousness (ATH, 3 bar swing formed).
Blue lines form the channel, which is the Keltner Channel. It shows the tunnel of extremes as well. This means that if we reach the lower band, we may dance there for a while, and then it will bounce.
Hypothetically, if we enter the bearish market, we need to see the lower low and the lower highs at least on the weeklies. For me it will tell that all bounces will be shorter (~ Fib. 0.382) and sharper, and I will adjust my expectations.
Coming back to the current situation on weeklies, I see we are on a bullish trend. On dailies, obviously in a downtrend and near its local bottom. We closed the old gap, so the next potential magnet is ~575-ish support. To confirm a bounce start we want to see at least 3 bar reversal, a ka lower low formed and follow through. The sentiment brightness might be sticky, so no promises.
Stay profitable!
Cheers!
Note
typo: brightness=bearishness
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.