SPY has been indecisive after breaking into the box on 27th December. It has posted all time highs during this time but the movement has been very subdued with less volume than normal.
Until SPY break above or below this range, It wouldn't make sense to open a position. Once SPY decisively closes above or below this range (1 candle closes above/below and then there is a confirmation candle that also closes in the same direction), that would be a time to open a trade.
My bias is bearish as SPY has already broken and closed under the 20 MA which has acted as support a number of times. If SPY breaks below, then the next critical area is 470-472 which has acted as resistance from 4 November until it was broken decisively on 27 December (it was a strong resistance as it was broken on the 11th try). We would need to check how strong of a support this area is. In case this is broken, the next support would be 465-468 and then all the way down to 454-457.
In my opinion, SPY will gap down on Monday below the 470-472 area which will then naturally act as resistance. Over the next week, I think we will see 465s or even early 460s.
This idea gets invalidated if SPY breaks 480 decisively
Until SPY break above or below this range, It wouldn't make sense to open a position. Once SPY decisively closes above or below this range (1 candle closes above/below and then there is a confirmation candle that also closes in the same direction), that would be a time to open a trade.
My bias is bearish as SPY has already broken and closed under the 20 MA which has acted as support a number of times. If SPY breaks below, then the next critical area is 470-472 which has acted as resistance from 4 November until it was broken decisively on 27 December (it was a strong resistance as it was broken on the 11th try). We would need to check how strong of a support this area is. In case this is broken, the next support would be 465-468 and then all the way down to 454-457.
In my opinion, SPY will gap down on Monday below the 470-472 area which will then naturally act as resistance. Over the next week, I think we will see 465s or even early 460s.
This idea gets invalidated if SPY breaks 480 decisively
Comment:
The last hourly candle closed below the red line. Now the open and the first few hours of Monday are very important to decide if we can expect more bearish movement.
Comment:
SPY gapped up in the PreMarket and is again in the range. However, the first few hours of the market are important to get a better idea (as PreMarket has lower volume and isn't decisive).
Comment:
And we are back in the range. SPY needs to break above or below and I hope we will see a direction today.
Comment:
Today, it bounced off the lower bounds of the channel and is moving up. It will most probably test the upper bounds tomorrow and if it can break it, then my bias will turn bullish.
Comment:
SPY broke out of the accumulation to the upper side and is now testing the top of the channel as support. If it holds into market open, then we are again into bull territory.
Remember: open positions once SPY has decided where it wants to go.
Remember: open positions once SPY has decided where it wants to go.
Comment:
SPY reacted negatively to the FOMC meeting minutes and just broke down the channel and is currently testing the next strong support. It either breaks that and we go to test 464-465. This seems more likely now
Trade active:
Active since 470s were breached
