SPY breaks down from its channel and it's likely it going down to retest 20 days MA and old trend line which was broken two weeks ago, blue dotted one. Several indicators indicate this leg up is over and it's ready for a drop. On the 2nd of Feb SPY formed an exhaustion gap which is usually a sign o the end of the cycle and is the capitulation phase. Furthermore, SPY formed a lower high and yesterday SPY formed a bearish Harami reversal candlestick pattern and break the trendline from its channel. Not only that, it breaks down from a rising wedge pattern which is very bearish. 4 strong indicators indicate it's over with up leg.
Volume is neutral.
Price is still above all major MA which is bullish.
RSI is cooling down but is also forming lower highs and even lower lows which will make pressure on price.
MACD histogram is ticking lower while the MACD line is still above the signal line. Yet the MACD line starts to move down and with the possible price fall it will cross over. Also on MACD, there are strong negative bearish divergences which are signs of a lack of momentum.
Overall: too many indicators are pointing that this 7 weeks leg up is over. On both daily and weekly it is over-extended to the up and needs to cool down. Can the price just cool down and consolidate on this level time will tell, but with all the new data, and horrible corporate earnings (the only reason for the stock going up is a massive layoff, damn how that can be positive, who will spend money than), with FED saying more and more interest hikes are in front of us, I am not positive for consolidation option. It is more likely price will fall to at least 20 days MA or test the blue dotted trend line and try to find support there. IN 4 days we will have CPI data which will move the market and the market to choose which direction will be for February and march.
For now, it's a sell signal due to the above-mentioned.
Volume is neutral.
Price is still above all major MA which is bullish.
RSI is cooling down but is also forming lower highs and even lower lows which will make pressure on price.
MACD histogram is ticking lower while the MACD line is still above the signal line. Yet the MACD line starts to move down and with the possible price fall it will cross over. Also on MACD, there are strong negative bearish divergences which are signs of a lack of momentum.
Overall: too many indicators are pointing that this 7 weeks leg up is over. On both daily and weekly it is over-extended to the up and needs to cool down. Can the price just cool down and consolidate on this level time will tell, but with all the new data, and horrible corporate earnings (the only reason for the stock going up is a massive layoff, damn how that can be positive, who will spend money than), with FED saying more and more interest hikes are in front of us, I am not positive for consolidation option. It is more likely price will fall to at least 20 days MA or test the blue dotted trend line and try to find support there. IN 4 days we will have CPI data which will move the market and the market to choose which direction will be for February and march.
For now, it's a sell signal due to the above-mentioned.
Consistency is the key of success....
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.
Consistency is the key of success....
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.