Looks like we have one of 3 possibilities that can occur:
1. Ascending channel - Look at lines 1 and 2 - Make a perfect ascending channel - the bull case - We tried to break below 275 multiple times today and weren't able to - not enough volume. We ended just below 0.5 fib after crossing it multiple times in the day. Hypothesis: The much-needed push and volume to break spy out of the ascending channel does not exist especially with the end of day fed pumps.
2. Rising wedge case 1 - Look at lines 4 and 2. SPY breaks out around the first week of May anywhere between 295-310. The shape will become clearer as the week progresses.
3. Rising wedge case 2 - Look at lines 3 and 2. SPY breaks out pretty soon, after the end of this week around 285-295.
Case 1 is majorly bullish while cases 2 and 3 are bearish with varying levels to break out from (bull traps).
There are other patterns possible as well - possible island reversal around 0.5 fib line, also possible crown formation which plays into cases 2 and 3 eventually.
Let me know what you guys think in the comments?
1. Ascending channel - Look at lines 1 and 2 - Make a perfect ascending channel - the bull case - We tried to break below 275 multiple times today and weren't able to - not enough volume. We ended just below 0.5 fib after crossing it multiple times in the day. Hypothesis: The much-needed push and volume to break spy out of the ascending channel does not exist especially with the end of day fed pumps.
2. Rising wedge case 1 - Look at lines 4 and 2. SPY breaks out around the first week of May anywhere between 295-310. The shape will become clearer as the week progresses.
3. Rising wedge case 2 - Look at lines 3 and 2. SPY breaks out pretty soon, after the end of this week around 285-295.
Case 1 is majorly bullish while cases 2 and 3 are bearish with varying levels to break out from (bull traps).
There are other patterns possible as well - possible island reversal around 0.5 fib line, also possible crown formation which plays into cases 2 and 3 eventually.
Let me know what you guys think in the comments?
Comment:
Looks like futures are headed into the red for now. Think the bounce off of the 0.5 fib may be the top of the crown we expect and depending on where we open tomorrow, we may or may not have formed the top of the crown.
Comment:
With futures turning green, tomorrow may be another gap day and we may end up in early 280s. Will unload my calls and sit on the sidelines Friday. Still have long puts.