SPY Week-Ending April 19

The gap zone from the Island Pattern earlier this year seems interesting because 510-505 are less thoroughly traded so far this year and will likely be the area we return to when this pullback is done. Bearish price action is all but confirmed, but can we expect an elevator down first thing on Monday?
Asia Trading Sessions

A New Price Foot (Shin Ne Ashi) has formed on the 15 minute Nikkei chart. This usually means price has found a new bottom and will re-test the resistances above it. The Nikkei had made a new all-time-high just last month on uncertainty about more currency weakness. The Yen continuing to fall versus USD may mean Asiadollars are looking for a place to enter US equities with relative advantage.

The NDQ Asia Index gapped down during the session, which also has bad implications. We'll see how the pre-market looks.

This looks like it could touch the bottom of the Ichimoku cloud and bounce again before open. It could also keep falling. But I wouldn't be surprised to see a touch of the 200MA here before selling resumes

VIX did look like it double topped on the fifteen, but tenkansen and kijunsen are very close to touching and that Ichimoku cloud "neck" at the bottom is very thin... Volatility could fall rapidly before reclaiming the upward channel


I've sometimes heard this called "prop before drop"

End of Monday

After spending a few 15 minute candles above 514.10 this morning, SPY sold aggressively until we bounced off of the 503.50 area. I think there's more selling ahead, with likely resistances above.

VIX did find the small Ichimoku neck as resistance and then continued rising with the channel. Of note today is that both SPY price-action and VIX had charts where tenkansen & kijunsen touched/crossed, making a violent reaction.
Futures & Asia Session

Futures declined continuously from the 200MA touch charted above yesterday. Today looks like it will not break the Ichimoku cloud before opening.

The NDQ Asia index continued straight down to touch the bottom of the Ichimoku cloud.

We'll be keeping an eye on SH, the unleveraged Short S&P 500 ETF, to see what volume forms at open.

SPY touched the top of the gap and kept in a tight range so far today. I am thinking we'll see a rally to some higher point before more selling - if this is not just a tight range day before Buy The Dip price action tomorrow.

VIX did not make a new high, but touched yesterday's and has begun to retrace - but watch out for that 50% retracement level (also the loglinear channel top)

SH also looking pretty tired for now
End of Tuesday

SPY formed a candle body completely within the Ichimoku cloud, closing below the daily logarithmic Ichimoku cloud upper level of 504.48. Log Ichimoku & normal Ichimoku charts are not that different and the logarithmic levels are not touched as resistances very often. Price action does not usually want to stay near them.

Price touched and rejected from 506 today and now the cloud is nearby overhead. There are a few possibilities in this scenario. (1) is a break of the Ichimoku cloud, then probably a test of the 200MA above and then a re-test of the cloud's top. This is usually bullish. (2) is a break of the bottom of the Ichimoku cloud, but not the top, after which price usually falls out or continues inside. The cloud is negative (dark), so this is neutral-bearish. (3) is a test and rejection of the bottom of the cloud, after which price likely continues bearishly.

Tomorrow's price action will give us clues on how the week ought to end.

Daily and hourly are shown. ADX is now pointing up after reaching the low set in October. ADX can point up before a change in price-action trends is confirmed a few candles later on other indicators (Stochastic RSI is still flat here). The hourly group looks very positive, with ADX crossing over -DI.

This group is very flat on other timeframes. So there may be a burst of energy that runs out quickly, followed by smaller changes in price until trendiness changes on the higher timeframe momentums.
End of Wednesday

SPY followed, roughly, path (3) today. It did not touch the top of the fifteen minute Ichimoku cloud before resuming down - it did not even touch the top of the candle wick it made yesterday, which is fairly bearish.

Looking at the daily now we see the bottom of the gap and the bottom of the Ichimoku cloud on the daily.


A follow-up on the momentum indicators from yesterday. The "burst of energy" suggested on the 1H turned into a gap up this morning - but selling started right away. Also of note is 1H -DI kept falling after crossing 1H ADX. The 1D ADX is also still pointing up, showing a negative divergence with today's continued selling.
End of Thursday

Price finally touched rejected from the downward-sloping chart bottom. These thin "necks" are often crossover points. Unless SPY is basing just below the psychological 500.00 mark, near-term price action looks poor into next week.
Friday Midday

SPY filled in the gap zone and looks to be basing itself with a long wick. Here is the first Ichimoku cloud resistance on the 5 min. There is a Shin Ne Ashi formation here. In a situation like this, it is helpful to wait to see if there is a retest on higher timeframes before doing anything. This is the "neck" of the cloud where breakout or failure most often occur.
End of Week

Price rejected from the cloud & gap zone and kept falling. Looks like it could try again on Monday but volume has been gone this whole week.

Futures may have bottomed, but we'll need to see the pre-market action on Monday. This week closed below all kinds of bearish levels.

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