SPY: is the bearish case too obvious?

The weekly close today was straight up horrendous. We've got a channel break, retest and fail and confirmed this week. We've got a bearish engulfing candle. We've got bad news from NVDA, TSLA, Banks, FED etc. So, shorting right here is kind of a no brainer; right?

Well, let's take a deeper look. On RSI, everytime there is a double touch on the lower end of bollinger bands, albeit during the last macro downtrend, there was a significant bounce. And both times there was a lower low. This time market is on a macro uptrend (yeah still it is, even though it is in an intermediate downtrend), and this week is still a higher low. The total regression hasn't been even to .618 level yet. There is a macro cup and handle still in works until price regresses more than 50%.

So is it time to load up on shorts or buy a whole bunch $300 puts? I am afraid, I won't be doing that. What I am intending to do is to wait for a bounce. $426 should be the failure point if market really wants to dump down to Oct 2022 lows. There are massive supports down below, so I don't expect market to do a nose dive as many are predicting. I will watch what happens next week and if we do get a bounce and a failure at $426, I will buy some downside options. For now, I am out on the sidelines.


The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.