I am expecting a bounce early next week, RSI(9) is oversold and at a bounce point like the past two instances on this chart. However, selling was relentless on Friday, with no sign of covering at days end. So, it’s likely Monday AM will begin in the red. There is no significant economic news on Monday, although the general climate is negative with budget talk and union strikes.
The chart shows two possible low points for SPY, 427.44 (black D) which is a 1.27 extension on the black ABCD pattern. The other is 429.34, which is a .382 retrace from the high on 7/27/23 at the red B. Still a third is 425.43 which is a Gann confluence.
I would expect a rebound to the mid-channel of the regression trend in black (dashed black line). A logical stopping point would be the Gann confluence at 438.44. At that point, it remains to be seen if it is rejected or if it blasts toward the upper channel.
The black regression trend merits close watching, since it signals a potential trend reversal from the uptrend begun in mid-march. This trend will need to be broken to resume the prior uptrend. A break below 425.43 would set up a run to 420, which is 50% retrace from the high point red A, since volume in that area is light.
The chart shows two possible low points for SPY, 427.44 (black D) which is a 1.27 extension on the black ABCD pattern. The other is 429.34, which is a .382 retrace from the high on 7/27/23 at the red B. Still a third is 425.43 which is a Gann confluence.
I would expect a rebound to the mid-channel of the regression trend in black (dashed black line). A logical stopping point would be the Gann confluence at 438.44. At that point, it remains to be seen if it is rejected or if it blasts toward the upper channel.
The black regression trend merits close watching, since it signals a potential trend reversal from the uptrend begun in mid-march. This trend will need to be broken to resume the prior uptrend. A break below 425.43 would set up a run to 420, which is 50% retrace from the high point red A, since volume in that area is light.