SPY is the for SP500 , and ES1! is the future contract for SP500 , so they are of necessity closely related in price movement, targets, etc.
We are sharing this chart of ES1! to demonstrate this concept. If you trade SPY , ES1! , or SP500 this chart can be of great service to you to consider if you are a longer term investor/trader.
As we have stated in other posts on this site, the 2nd target of any entry is always the most important from a technical standpoint. Normal market behavior if the 2nd target is reached is a period of profit taking and a reversal. The only time this does not occur is when there is a fundamental catalyst to propel the underlying toward the 3rd target. This occurs more frequently on shorter time frames, but occasionally does happen on long time frames.
The reaction taking place in the market( SP500 ) is a normal occurrence and is to be considered healthy for the long term. The targets for the short which is now being reacted to very strongly are quite a bit lower than the current price. IF price action reaches these targets, you can be sure that the longs will re-enter with determination to propel the market to the next high.
Our long range analysis of the market has not changed, as there is another high on our radar that we will be targeting. That said, we always trade long-term trend, short-term counter trend on all times frames that we trade.
Unlike traditional fundamental or , our approach is able to pinpoint entry ranges, both long and short far in advance of price reaching the entry levels. This is true in all price ranges, including when there are new highs or lows as well as when an issue is an . This enables our clients to plan their entries/exits far in advance of the overall market.
NOTE: This is a day chart but the all time LT Swing targets have not yet been reached.