SPY may be forming a wyckoff top
With greed at extreme levels and retail eagerly buying this seems like a good place for institutions to trim their positions. Smart money inflow has been low during the rally and insiders have been selling shares in record numbers.
The buying power of retail will probably dry up soon and that will lead to the next leg down. We may get what is called an "upthrust after distribution" perhaps when the January CPI numbers come out. If the numbers look good watch for a new high to form just above 418 that gets rejected, that would be a huge indicator if it were to happen, of course there is also the scenario where the CPI numbers are not initially interpreted as bullish and the market simply trudges on and marks a lower low. Either of these plays into the wyckoff top thesis.
A confident close at 420 that holds for 2 days signals the push to 430.
Patience is key. Watch the pattern over the next week and see if we can't close above 418. We should also make a lower low on a closing candle. That will be a good signal that this is the top and we will be headed lower.
The buying power of retail will probably dry up soon and that will lead to the next leg down. We may get what is called an "upthrust after distribution" perhaps when the January CPI numbers come out. If the numbers look good watch for a new high to form just above 418 that gets rejected, that would be a huge indicator if it were to happen, of course there is also the scenario where the CPI numbers are not initially interpreted as bullish and the market simply trudges on and marks a lower low. Either of these plays into the wyckoff top thesis.
A confident close at 420 that holds for 2 days signals the push to 430.
Patience is key. Watch the pattern over the next week and see if we can't close above 418. We should also make a lower low on a closing candle. That will be a good signal that this is the top and we will be headed lower.
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