benjihyam

$SPY update: Idea hasn't changed, only the timing. $480 next.

Short
benjihyam Updated   
BATS:SPY   SPDR S&P 500 ETF TRUST
Update:

Largely the same idea, just the timing changed.

I was wrong in that I initially thought we'd reject the $525-530 area and move down to my target of $480, then form a final high by the end of July/August around $550. However price decided it wanted to go straight higher to $550 area before it falls.

Think we'll see a final high be put in sometime in the next week, then we'll finally make the move lower to my target of $480.

The current move extending all the way to $550 gives me confidence that this is likely to be the top for the year and we shouldn't see a move back to this area.

While the index is going to start its decline into a bear market, certain individual stocks will still see new highs. The tricky part will be identifying which ones still have upside left. Largely I think we'll see the long-term reversals on the Mag 7 and money flow into value stocks.

Lots of beaten up charts that look good for upside soon. I'll start sharing those shortly.
Comment:
Unlikely that we see the upper resistance (at least for now). After today's price action, I'm leaning to the downside here.
Comment:
Okay, 50/50 as of today. If we do hit the resistance level tomorrow, I'll probably add to my put position.
Comment:
Not sure if we'll get all the way up to $552. Could see it double topping here. Might want to start scaling into puts...

September puts are safest.
Comment:
Could see the possibility of hitting the top resistance, especially if we get a positive close today. Let's see what happens into today and Friday.
Comment:
Bought Oct 18 $480 puts at open. Resistance finally tagged.
Comment:
Also bought some $556P for 7/12
Comment:
Looking like the idea will end up being correct. Although we broke above resistance, if we break back down through the upper box and close below it, it'll be extremely bearish for SPY in the near term.

See the top of CMG as an example. Same thing happened, a fakeout above resistance, then a break down below and now down 15% off the highs already.

Will continue to watch here price action, but based on weakness, that's my base case from here.

Combine that with Demark 13s on 60, 4hr, daily and weekly timeframes. Pretty confident in this move marking the top.
Comment:
Also liking the idea that this top will mark the flow into value stocks. You can see the early signs of that beginning w/ IWM up on the day while QQQ is down big. This chart starting to reverse after a brief move above the trendline:
I'll be posting some interesting charts that I've been watching over the next few weeks (there may be short term moves down in them, but they're great stocks to buy and hold over the coming years).

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