SPY is building a rising wedge on the weekly chart. On the daily chart it has a falling wedge within, which indicates a short term bounce may be coming to fill the gap above at 455-456 and test the recent high at 459.
AAII survey continues to maintain high levels of bullish sentiment despite the past 2 weeks of selling. However, I want to point out that the NAAIM exposure index has dropped from over 100 2 weeks ago to 65.5. That’s a big dial back and its showing caution is the current trend. On July 27th, active manager equity exposure was over 100% due to leveraged longs with the S&P over 4500. As of August 11th, that has dropped to 65.6.
Key level for the upcoming week is 442.97
Bull case: Above 442.97 falling wedge is in play to target 445.32 then 448.65 and 451.94. Big squeeze above 451.94 to target 455.49 and then test the highs at 459.44
Bear case: Below 442.97 target 441.98. There is heavy support at 441.98-442.97 and it won’t go down easily. If bears can take it down, then targets 437.86 and 431.19. (rising wedge fires)
AAII survey continues to maintain high levels of bullish sentiment despite the past 2 weeks of selling. However, I want to point out that the NAAIM exposure index has dropped from over 100 2 weeks ago to 65.5. That’s a big dial back and its showing caution is the current trend. On July 27th, active manager equity exposure was over 100% due to leveraged longs with the S&P over 4500. As of August 11th, that has dropped to 65.6.
Key level for the upcoming week is 442.97
Bull case: Above 442.97 falling wedge is in play to target 445.32 then 448.65 and 451.94. Big squeeze above 451.94 to target 455.49 and then test the highs at 459.44
Bear case: Below 442.97 target 441.98. There is heavy support at 441.98-442.97 and it won’t go down easily. If bears can take it down, then targets 437.86 and 431.19. (rising wedge fires)
Trade active:
SPY now at 439
Due for technical bounce
50sma at 443.78 may be retested
Watching July lows - if they hold we will squeeze back up to 452-456+. If we make new low vs July low then we target 424 direct.
Due for technical bounce
50sma at 443.78 may be retested
Watching July lows - if they hold we will squeeze back up to 452-456+. If we make new low vs July low then we target 424 direct.
Trade active:
We have now squeezed back up to 452-456 areas as mentioned. Now we need to watch out for this backtest reaction - and see if the 50sma on daily holds or not.
The island top gap above has yet to be filled and so it is too early to call for new highs. For now i think as long as that gap has NOT filled, we can continue back down into 424.
The island top gap above has yet to be filled and so it is too early to call for new highs. For now i think as long as that gap has NOT filled, we can continue back down into 424.