Will SPY hold 3500, a 50% Fib level from pandemic low to ATH?
SPY as of today, like in the 2009 parallel in my post before this, also had a daily deathcross. Then price made a June low at 3636, bounced up to retest dma200(wma50) but was also rejected similar to 2009. SPY also gave up all gains & even broke below the June low.
Twinkle of HOPE: if entailment this week changes to positive, It is still possible that SPY may make a slightly lower low at around 3500 to create the divergence for an oversold bounce. 3500 happens to be the Fib 0.5 retracement from the pandemic low to January ATH.
BEARISH CASE: if 3500 will not hold, then the 312 to 320 zone will be the next support at Fib 0.618. Further waterfall will see 3000 & 2800 specially if wma50 crosses down wma200 (deathcross). Then probably the midterm election rally into new year.
Not trading advice. Proceed with extreme caution!
Twinkle of HOPE: if entailment this week changes to positive, It is still possible that SPY may make a slightly lower low at around 3500 to create the divergence for an oversold bounce. 3500 happens to be the Fib 0.5 retracement from the pandemic low to January ATH.
BEARISH CASE: if 3500 will not hold, then the 312 to 320 zone will be the next support at Fib 0.618. Further waterfall will see 3000 & 2800 specially if wma50 crosses down wma200 (deathcross). Then probably the midterm election rally into new year.
Not trading advice. Proceed with extreme caution!
Besides being he Fib 50% retracement level, 3500 is also the weekly wma200 & a strong bounce zone. Since SPY had a strong wave 1 rally from the pandemic low, with wave 2 retracing less than 38.6%, the current wave 4 tend to retrace bigger like a 50% or a 61.8% (350 or 320 in SPY)).
Since Elliotte Wave theory states that wave 4 shall not retrace lower the wave 1 top, so wave 4 shall not go below 3500 if my labeling for wave 1 top is correct.
These are just my personal analysis & may all be wrong. Exercise due diligence.