The S&P 500 Approaches Major Resistance! (SPY)
Hi friends! Welcome to this update analysis on the S&P 500, via the SPY ETF! Let's get right to it.
Looking at the daily SPY chart, we can see that price has continued to rally toward the neckline (blue trendline) of the head and shoulders pattern that it broke down from. If you recall from my prior analyses on the S&P and the DOW, I said that it was likely that we would see price return to the neckline to test it and confirm it as resistance. Since we haven't yet made contact with the blue trendline, I do see at least a little more upside so that the market can test it. However, it is possible that we will not make contact with the neckline, particularly because the 50 EMA (in orange) is just now starting to cross below it. With that said, I think there is a high likelihood that the 50 EMA and or the neckline will act as powerful resistance. In other words, the upside potential is likely very limited, now that we are within striking distance of these critical resistance levels.
This price action is well expected, and inline with the general direction of movement that resembles the price movement of 2008. I believe that the market has topped, and that we are on the brink of an epic meltdown. Technically, it could take up to 12 months for the market begin a major downside acceleration, or it could happen much sooner. I believe that we are in a new downtrend channel (in black.) So, we could be touching the top of the channel at the end of 2019, and be near today's price levels. That's why I'm saying that the big breakdown is likely to happen sometime within the next 12 months or so. Regardless, the market is approaching significant resistance, and it is likely to fail at that resistance. Therefore, if we see a rejection of the 50 EMA and/or the neckline of the head and shoulders pattern, that would increase the bearish outlook for the longer-term view. On the contrary, a confirmed breakout above the neckline would signal unexpected strength in the market, and that could produce a test of the top of the downtrend channel. Although, I do believe that is highly unlikely. For now, we have to watch for a failure at the neckline or the 50 EMA, which should happen in the next few sessions.
Be smart. Be nimble. Good luck trading everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Looking at the daily SPY chart, we can see that price has continued to rally toward the neckline (blue trendline) of the head and shoulders pattern that it broke down from. If you recall from my prior analyses on the S&P and the DOW, I said that it was likely that we would see price return to the neckline to test it and confirm it as resistance. Since we haven't yet made contact with the blue trendline, I do see at least a little more upside so that the market can test it. However, it is possible that we will not make contact with the neckline, particularly because the 50 EMA (in orange) is just now starting to cross below it. With that said, I think there is a high likelihood that the 50 EMA and or the neckline will act as powerful resistance. In other words, the upside potential is likely very limited, now that we are within striking distance of these critical resistance levels.
This price action is well expected, and inline with the general direction of movement that resembles the price movement of 2008. I believe that the market has topped, and that we are on the brink of an epic meltdown. Technically, it could take up to 12 months for the market begin a major downside acceleration, or it could happen much sooner. I believe that we are in a new downtrend channel (in black.) So, we could be touching the top of the channel at the end of 2019, and be near today's price levels. That's why I'm saying that the big breakdown is likely to happen sometime within the next 12 months or so. Regardless, the market is approaching significant resistance, and it is likely to fail at that resistance. Therefore, if we see a rejection of the 50 EMA and/or the neckline of the head and shoulders pattern, that would increase the bearish outlook for the longer-term view. On the contrary, a confirmed breakout above the neckline would signal unexpected strength in the market, and that could produce a test of the top of the downtrend channel. Although, I do believe that is highly unlikely. For now, we have to watch for a failure at the neckline or the 50 EMA, which should happen in the next few sessions.
Be smart. Be nimble. Good luck trading everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment:
www.tradingview.com/...Plummet-to-12000-YM/