If a security is trading in range, when it breaks out or breaks down, the general target is the height of the range. Looking at the weekly chart of
SPY
, I see that it is no exception.
Starting in October, SPY bounced back to top of the range. If it breaks out convincingly, based on previous history, all time highs around 470-480 cannot be ruled out. If it does not break out and retraces back to October lows and breaks down, using the same logic, the target below will be 300.
If SPY reaches 470-480 range and breaks out successfully to new all time highs, based on history and range, the new target will be 600 (480 + 120). It seems wild, I know. That is what I thought when it broke out of pre-covid highs. I personally prefer 300 first than 480.
As of now I am bullish on SPY as long as it does not break 380-370 (recent swing low). I learnt it the hard way not to apply logic (high interest rates, inflation etc.) to market moves.
SPY
, I see that it is no exception. - 2018 - 2019 range breakout took it to pre-covid highs.
- 2020 Covid dip - Range breakout took it to 2021 - 2022 all time highs
- 2022 bear market - Took two almost equidistant tumbles (480-470 to 420-410 and then from 420-410 to 370-360)
Starting in October, SPY bounced back to top of the range. If it breaks out convincingly, based on previous history, all time highs around 470-480 cannot be ruled out. If it does not break out and retraces back to October lows and breaks down, using the same logic, the target below will be 300.
If SPY reaches 470-480 range and breaks out successfully to new all time highs, based on history and range, the new target will be 600 (480 + 120). It seems wild, I know. That is what I thought when it broke out of pre-covid highs. I personally prefer 300 first than 480.
As of now I am bullish on SPY as long as it does not break 380-370 (recent swing low). I learnt it the hard way not to apply logic (high interest rates, inflation etc.) to market moves.
Comment:
I was very skeptical when I posted this idea. This does not seem wild anymore.