SPY making a critical move tomorrow
Updated
This SPY Schiff pitchfork is anchored to the lows of the Covid crash, extended to the November 2020 double bottom that started this whole mess.
After losing the healthiest median 0 level in May, bullish dominance in SPY has weakened. The -0.75 level, in this case the lowermost dashed red line, has only been interacted with three times since 2021, two of which have been within the last quarter (circled).
However, after Fed minutes were released today, SPY quickly encountered that level again.
Note that despite this selloff, RSI is still well off the support each prior -0.75 move has prompted.
RSI has a concerningly far distance to travel before encountering that support again (marked with dotted pink line), which leads me to believe we may be in for another red day.
Concerningly, the same Heiken-Ashi candle setup we've seen from both today and yesterday seem parallel to the circled 0.75 moves, where two days of mild selling led to gaps down the subsequent trading day.
Current MacD also aligns with MacD positioning on the days immediately prior to each ∼2.5% gap down.
It's possible that a move of this magnitude could interact with or even invalidate the critical -1.0 line, which would be a significant red flag.
I should also note that in the two weeks following each prior gap down, SPY has made a ∼6% move upward off it's lowest point, so this could also present a fantastic bullish swing opportunity.
After losing the healthiest median 0 level in May, bullish dominance in SPY has weakened. The -0.75 level, in this case the lowermost dashed red line, has only been interacted with three times since 2021, two of which have been within the last quarter (circled).
However, after Fed minutes were released today, SPY quickly encountered that level again.
Note that despite this selloff, RSI is still well off the support each prior -0.75 move has prompted.
RSI has a concerningly far distance to travel before encountering that support again (marked with dotted pink line), which leads me to believe we may be in for another red day.
Concerningly, the same Heiken-Ashi candle setup we've seen from both today and yesterday seem parallel to the circled 0.75 moves, where two days of mild selling led to gaps down the subsequent trading day.
Current MacD also aligns with MacD positioning on the days immediately prior to each ∼2.5% gap down.
It's possible that a move of this magnitude could interact with or even invalidate the critical -1.0 line, which would be a significant red flag.
I should also note that in the two weeks following each prior gap down, SPY has made a ∼6% move upward off it's lowest point, so this could also present a fantastic bullish swing opportunity.
Note
I would also like to note the bearish RSI divergence as well as the key structure/Fibonacci levels at 436 and 429. 436 is not an unreasonable bearish case target within a week, and 429 would be a "cut all bullish positions" level of signal, to me personally.Note
$436 zone ended up being a perfect bounce point. Expecting a rally off this support... but I can't exactly say I'm super bullish long term.
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