SPY Trade Idea (BULL TRAP)
Here Im using the trend based fib ext.
SPY is currently at the June highs and the 1.618 Fib level.
Seeing deviation with price making a higher high and the RSI making a lower low on the 4HR. (Bearish)
In June fear turned to euphoria in an instant. Talks about the bear market being over started, just like it is now.
Spy fell out of an ascending channel after initially getting rejected from the 1.618. (Bearish)
In June it took about a week to finally sell off and bull market talks faded in the. background. I think we see a similar story in the next few days and weeks.
If you're bullish i would be patient, things dont go up in a straight line. The RSI on the daily is at levels not seen since March. VIX is on a strong support which has generally marked local tops. If you notice there has been 3 times we previously touched this support and every time has been a sell signal. Same goes with the top resistance, every time we touched resistance it marked a local bottom in the stock market as you can see with the red and green arrows.
In the coming weeks I am bearish on SPY and anticipate a retest of 390, a break below that and the next level is 380.
However coming off one of the best months in a long time the medium to long term future looks bright for the stock market.
We look to be forming a possible inverse head and shoulders pattern on higher time frames and if this is the case we should see strong support in the 380-390 range. (This is where Im swinging long if the market gives us these levels). I would also like to see VIX at resistance to further confirm the trade.
I wouldn't be surprised if VIX broke out of this wedge, and give us the 40+ everyone has been calling for which if in fact we do reach those levels on VIX i think that would be the max opportunity to go long on the market. We will cross that bridge when/if we get there.
Ill soon be posting ideas on individual stocks, let me know if you guys agree or disagree!
SPY is currently at the June highs and the 1.618 Fib level.
Seeing deviation with price making a higher high and the RSI making a lower low on the 4HR. (Bearish)
In June fear turned to euphoria in an instant. Talks about the bear market being over started, just like it is now.
Spy fell out of an ascending channel after initially getting rejected from the 1.618. (Bearish)
In June it took about a week to finally sell off and bull market talks faded in the. background. I think we see a similar story in the next few days and weeks.
If you're bullish i would be patient, things dont go up in a straight line. The RSI on the daily is at levels not seen since March. VIX is on a strong support which has generally marked local tops. If you notice there has been 3 times we previously touched this support and every time has been a sell signal. Same goes with the top resistance, every time we touched resistance it marked a local bottom in the stock market as you can see with the red and green arrows.
In the coming weeks I am bearish on SPY and anticipate a retest of 390, a break below that and the next level is 380.
However coming off one of the best months in a long time the medium to long term future looks bright for the stock market.
We look to be forming a possible inverse head and shoulders pattern on higher time frames and if this is the case we should see strong support in the 380-390 range. (This is where Im swinging long if the market gives us these levels). I would also like to see VIX at resistance to further confirm the trade.
I wouldn't be surprised if VIX broke out of this wedge, and give us the 40+ everyone has been calling for which if in fact we do reach those levels on VIX i think that would be the max opportunity to go long on the market. We will cross that bridge when/if we get there.
Ill soon be posting ideas on individual stocks, let me know if you guys agree or disagree!
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