Does SPY want a correction? Maybe not but it will get one.

SPY has had a good run this spring. However, things are changing. Just this week, the debt \

ceiling got raised. The fed will be auctioning large amounts of treasuries to pay bills. This is

money that will not go into the equities markets. Buying volume on a dollar basis will likely go

down as a consequence.

On the daily chart with a double Bollinger Band setup, SPY is more overbought than ever.

The part of the body of the last candle of this past week went outside of both the inner and

outer bands. Looking back this has not occurred in well over a year. Candle wicks did go

outside the bands in late October 22 and mid-December 22. On lower time-frames SPY

has already pulled back into the Bollinger Bands and begun a reversal. I believe that

many traders will take their profits off the table and take another look at bonds and treasuries.

ETFs like TLT and TMF may see significant inflows no matter for stocks in general may not.

I see this as a SPY pullback or correction upcoming for which to take a short trade.

I will look at SPY and QQQ put options with very short DTEs as well as call options on SQQQ.

For stock purchases, I might go with the ETFs SPXS and SPXU. The simple and basic analysis is

their chart shows price candles partially below the lower Bollinger Bands, the inverse of

the SPY. They are oversold and accordingly available for purchase at a discount.


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.