SPY: The Main Turning Points - H & D Charts.1-Hour Chart (Left Side)
On the 1-hour chart, SPY is showing a consolidation phase within a narrow range between $563.17 and $554.86. The price is moving above a rising trendline, which has acted as a support level, indicating that the market is still trying to maintain its bullish bias. The 21-hour EMA is also trending upwards, further supporting the bullish sentiment. However, the price is nearing the resistance level at $563.17, which has been tested multiple times without a decisive breakout.
If the price manages to break above this resistance, it could signal a continuation of the upward move and we'll probably see a new ATH next. However, failure to break this level might lead to a pullback, potentially retesting the trendline or the lower support at $554.86.
Daily Chart (Right Side)
The daily chart provides a broader view, showing that SPY has been in a steady uptrend, with the price consistently staying above the 21-day EMA. The recent price action shows a test of the $565.16 resistance level, which is the ATH, and it aligns with the upper boundary of the current consolidation range on the 1-hour chart.
The key support level on the daily chart is around $554.86, which is consistent with the support identified on the 1-hour chart. Here we see why: It was a previous top level, and now it is acting as a support - an example of the Principle of Polarity. A break below this level could indicate a more significant pullback, potentially targeting lower levels, like the 21-day EMA.
Key Levels to Watch
Resistance: $563.17 (1-hour chart), $565.16 (daily chart).
Support: $554.86 (both 1-hour and daily charts).
Summary
SPY is currently consolidating within a tight range, with the potential for either a breakout above $563.17 to continue the bullish trend or a pullback towards the $554.86 support level. The overall trend remains bullish, as indicated by the rising EMA on both the 1-hour and daily charts. For now, should monitor the breakout or breakdown of this consolidation range to gauge the next significant move. NVDA's earnings will play a big role in the next move, so this week will be interesting.
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Remember, real trading is reactive, not predictive, so let's stay focused on the key points described above and only trade when there is confirmation.
“To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.” — Jesse Lauriston Livermore
All the best,
Nathan.
