SPY: Bounce to $430 then Dump to $400

SPY appears to be barreling towards the completion of a rug-pull event that kicked off back in March of this year. The downside target for this event is $399.88.

Although we ultimately place SPY hitting $399 in the near future as a high probability, we do see yet another rug-pull event that has taken place at the $429 price target on a smaller timeframe:

This is confluent with a weak bullish divergence that is appearing on the Daily chart. This supports the thesis that a bounce to the $430 area will occur before we ultimately sell-off down to $400.

Ultimately we see many bearish factors as we enter what is traditionally a bullish time of the year. See our related idea that dives into what we can expect from the VIX in the coming weeks:

Disclaimer:
Any information contained within this post does not constitute any financial, investment, or trading advice. Trade or invest at your own risk.

Comment:

SPY is heading towards $430 as expected. We see the $430-$435 price range as a minimum upside target.

There is even more cadence towards a downside move following this rally as another rug pull has appeared at the $413 level.

Comment:

SPY has reached the upper-bound of our target range at $435 as of Friday's close. We now see several rug pull events below the current price target on various timeframes as a result of last week's violent upthrust:

We also see potential hidden bearish divergence appearing on the larger timeframes:

Finally, we see a bearish inverted hammer candlestick on the 4H chart to closeout the day on Friday:

Bulls thus far have not been able to fill the gap left at $438.43 on September 20th's gap-down. If we see a reversal here, bears may drive the price down to around $420 where there is significant support. Watching to see how this plays out...