SPY update (clues galore are emerging)
After a long uninterrupted bull move from 3/13 to 7/27, we only had a 0.35 retrace from red B to red C. This is not natural, 0.5 or 0.618 would be more appropriate, and red C did not complete a move to a prior pivot.
Also, black C posted what we call a black candle. I know its not black here -- if you chart this at stockcharts.com you see a black candle. Black candles occur when there is a gap up at open and a close below the open. When they stand alone (like the candle at black C), they almost always mark a reversal. Also, in this case black C failed to close a gap set on 8/1. Not by much, but a failure nevertheless. Also, RSI has stalled around 61, short of the technical overbought area, a sign of weakness.
I see two scenarios:
Bullish: more selling to black D, around 443 (top purple line), which is a prior pivot as well as a Gann Confluence. Then a resumption on toward Red D, a 1.27 extension of the major ABCD move.
Bullish/Bearish: Alternately, the run toward red D could stop at the level of red B (459.44) and then set a double top on the 3/13 to 7/27 move.
Bearish: continued selling to prior pivots at 438 or 431 (bottom 2 purple lines).
In any case, there will not be a new all time high any time soon (479.98 set on 1/4/22).
Also, black C posted what we call a black candle. I know its not black here -- if you chart this at stockcharts.com you see a black candle. Black candles occur when there is a gap up at open and a close below the open. When they stand alone (like the candle at black C), they almost always mark a reversal. Also, in this case black C failed to close a gap set on 8/1. Not by much, but a failure nevertheless. Also, RSI has stalled around 61, short of the technical overbought area, a sign of weakness.
I see two scenarios:
Bullish: more selling to black D, around 443 (top purple line), which is a prior pivot as well as a Gann Confluence. Then a resumption on toward Red D, a 1.27 extension of the major ABCD move.
Bullish/Bearish: Alternately, the run toward red D could stop at the level of red B (459.44) and then set a double top on the 3/13 to 7/27 move.
Bearish: continued selling to prior pivots at 438 or 431 (bottom 2 purple lines).
In any case, there will not be a new all time high any time soon (479.98 set on 1/4/22).
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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.