SPY Update! Yay!
I am posting this now before ES futures open. This is just based on my SPY models and chart review. I will post a little update once I have futures open data to verify that those numbers align with the numbers here. They usually do, but because we are going into a really key point where SPY could go either way, I think it merits a bit of a verification and update. So I will post that after 6;20 ish EST.
Let’s get into it. Lots going on in the world of SPY. Lots going on indeed. Let’s take a look at where we are and what to expect. I am going to start off with the technical, because these are some really good looking technicals.
Gaps Everywhere
We got gaps everywhere. Gaps below, gaps above, literally everywhere. The pivotal gap that I think deserves some attention is the gap we created on Friday. This gap actually served as a key support area for SPY.
So, SPY used that gap as support to bounce off, and then created higher lows. Interesting. It is approaching an overhead gap that extends from 406 to 410.
Channel
As predicted, SPY remained range bound in its descending channel on Friday. However, it made strides to very close to the top of that channel and held (see below)
A break of this channel would be around 404, which also happens to be our bullish break for Monday that I calculcated. Interesting, right? I love when the math and the technical just… fall into place like that. Its like, a sign from above or something.
Chart Overall
SPY is in a megaphone type pattern. It happened to hit the bottom support and bounce off and is now in a trajectory towards the top point (see 1 hour chart below):
There are some very bullish looking candles on the 4 hour chart. I find this particularly interesting (see below):
We have, I believe its called, a dragonfly doji? But either way, in those two candles identified by green arrows, you see that there was an aggressive sell that was rejected by buyers. Buyers stepped in and thrusted that price right back up. This continued into afterhours trading.
Oversold
SPY remains a tad oversold. And by a tad, I mean its severely oversold.
If we look at the Z-Score on the 4 hour chart, we see two recently triggered buy signals. This means that SPY has been pushed below -2.5 SDs away from its mean consistently over the past week. Its reached as low as -3 SDs within the past 2 trading days. This is an insane amount of stress on SPY.
SPY finished with a z-score of -2.38 on the 4 hour chart and -1.70 on the 1 hour. Not great, its still quite overdone in terms of sell off.
Ranges
Bullish Break: Break above 404
Bearish break: Break blow 398
Trading Range: 396 – 405
What to Expect
SPY is looking to move about 10 points between its high and low. My sentiment calculator is overall neutral, meaning that we will likely see good movement in both directions; however, it does think that SPY will rest on the bullish side in the sense that SPY likely won’t re-test or drop below 396 on Monday. It thinks that it will hold above this level.
I will break it down to what bulls want to see and what bears want to see. I can forsee both happening however I find the bullish case more persuasive based on where we currently sit, but that is just my opinion which is meaningless.
Bulls
Bulls want to see a break of 404. This is the bullish break. A break of 404 is also a break out of the descending channel. If this happens and holds, then SPY will have asserted at least a short term uptrend and we can consider us in a short term bounce at this point.
Bears
You want to see a break below 398. This is the bearish break. This is the messier alternative because with a break of 398, then we put that lower gap on the table to fill which spans from 392 to 395. Then, we would have to contend with that megaphone trendline at around 383 and then the channel trendline at around 380 – 378.
380 was my original hope to reach before bouncing, so if we backtracked down to this area, I would actually not mind it. But it just seems a bit messier at this point.
Key Takeaways going into Monday
- SPY remains quite oversold
- Sentiment calculations think that SPY will remain above 396 tomorrow
- Bullish Break is 404. A break of this level means SPY has asserted, at least intra-day, a bullish bias and probability rests in favour of bullish move continuation.
- Bearish break is 398. A break of this level means SPY has asserted, at least intra-day, a bearish bias and probability rests in favour of bearish move continuation.
- SPY is looking to do about a 10 point ish move between its high and low price tomorrow.
- If SPY breaks above 404 and holds, it will have asserted a short term uptrend and we can consider us in a bounce.
That's it!
Thanks for reading!
Also, I did not talk about where this stands for the week as that has to do with time series and I already did a comprehensive post on time series and what to expect. I will link it below.
As always, leave your comments/questions and criticisms below!
Enjoy the rest of your weekend! Hopefully the weather is as beautiful where you are as it is where I am :-).
I am posting this now before ES futures open. This is just based on my SPY models and chart review. I will post a little update once I have futures open data to verify that those numbers align with the numbers here. They usually do, but because we are going into a really key point where SPY could go either way, I think it merits a bit of a verification and update. So I will post that after 6;20 ish EST.
Let’s get into it. Lots going on in the world of SPY. Lots going on indeed. Let’s take a look at where we are and what to expect. I am going to start off with the technical, because these are some really good looking technicals.
Gaps Everywhere
We got gaps everywhere. Gaps below, gaps above, literally everywhere. The pivotal gap that I think deserves some attention is the gap we created on Friday. This gap actually served as a key support area for SPY.
So, SPY used that gap as support to bounce off, and then created higher lows. Interesting. It is approaching an overhead gap that extends from 406 to 410.
Channel
As predicted, SPY remained range bound in its descending channel on Friday. However, it made strides to very close to the top of that channel and held (see below)
A break of this channel would be around 404, which also happens to be our bullish break for Monday that I calculcated. Interesting, right? I love when the math and the technical just… fall into place like that. Its like, a sign from above or something.
Chart Overall
SPY is in a megaphone type pattern. It happened to hit the bottom support and bounce off and is now in a trajectory towards the top point (see 1 hour chart below):
There are some very bullish looking candles on the 4 hour chart. I find this particularly interesting (see below):
We have, I believe its called, a dragonfly doji? But either way, in those two candles identified by green arrows, you see that there was an aggressive sell that was rejected by buyers. Buyers stepped in and thrusted that price right back up. This continued into afterhours trading.
Oversold
SPY remains a tad oversold. And by a tad, I mean its severely oversold.
If we look at the Z-Score on the 4 hour chart, we see two recently triggered buy signals. This means that SPY has been pushed below -2.5 SDs away from its mean consistently over the past week. Its reached as low as -3 SDs within the past 2 trading days. This is an insane amount of stress on SPY.
SPY finished with a z-score of -2.38 on the 4 hour chart and -1.70 on the 1 hour. Not great, its still quite overdone in terms of sell off.
Ranges
Bullish Break: Break above 404
Bearish break: Break blow 398
Trading Range: 396 – 405
What to Expect
SPY is looking to move about 10 points between its high and low. My sentiment calculator is overall neutral, meaning that we will likely see good movement in both directions; however, it does think that SPY will rest on the bullish side in the sense that SPY likely won’t re-test or drop below 396 on Monday. It thinks that it will hold above this level.
I will break it down to what bulls want to see and what bears want to see. I can forsee both happening however I find the bullish case more persuasive based on where we currently sit, but that is just my opinion which is meaningless.
Bulls
Bulls want to see a break of 404. This is the bullish break. A break of 404 is also a break out of the descending channel. If this happens and holds, then SPY will have asserted at least a short term uptrend and we can consider us in a short term bounce at this point.
Bears
You want to see a break below 398. This is the bearish break. This is the messier alternative because with a break of 398, then we put that lower gap on the table to fill which spans from 392 to 395. Then, we would have to contend with that megaphone trendline at around 383 and then the channel trendline at around 380 – 378.
380 was my original hope to reach before bouncing, so if we backtracked down to this area, I would actually not mind it. But it just seems a bit messier at this point.
Key Takeaways going into Monday
- SPY remains quite oversold
- Sentiment calculations think that SPY will remain above 396 tomorrow
- Bullish Break is 404. A break of this level means SPY has asserted, at least intra-day, a bullish bias and probability rests in favour of bullish move continuation.
- Bearish break is 398. A break of this level means SPY has asserted, at least intra-day, a bearish bias and probability rests in favour of bearish move continuation.
- SPY is looking to do about a 10 point ish move between its high and low price tomorrow.
- If SPY breaks above 404 and holds, it will have asserted a short term uptrend and we can consider us in a bounce.
That's it!
Thanks for reading!
Also, I did not talk about where this stands for the week as that has to do with time series and I already did a comprehensive post on time series and what to expect. I will link it below.
As always, leave your comments/questions and criticisms below!
Enjoy the rest of your weekend! Hopefully the weather is as beautiful where you are as it is where I am :-).
Comment:
Market closed! Let’s recap!
I am not going to post levels or math predictions, if you followed the post above, chances are you are green today if you're a day trader =) haha. Yay you! That's your weekly freebee. ;)
But also, let's just mention, I got a little scared there at the start when this kept like, bouncing off the bearish break. I was worried! Not that I wanted to see SPY bullish, but I had consistent readings across all three of my math models that SPY would NOT fall to or go below 396 during market hours today. The data was so convincing that I was super confident in my post about it and I actually bet money on it today (jumping in long on the second test of the bearish break). And if it would have fallen below, man, I would have to retire from TV because clearly I'd be an idiot who has no idea what is going on. But thankfully, I was right. =) lol. So the spamming of TV will continue.
So let's recap and predict:
SPY said a lot today without saying much.
The wonderful thing about math levels is that you can understand exactly what the stock is thinking and why certain chart patterns emerge. We see that SPY bounced right off the bearish break a couple of times and got rejected just below the bullish break at 404.By definition this is consolidation, which we can see by the doji candle. (But don't you love understanding why we have a doji candle now? And how we can actually tell for real that this was consolidation? Because SPY failed to make a bullish or bearish break and thus a doji candle results? See how it all falls together?)
This is also very much expected because we have Powell's little speech tomorrow that he wants to talk about stuff that will likely not come as any shock. I don't really know what is going on with that, don't care either. I am assuming the market does care, but I will just react to whatever the market does.
As of right now, SPY is neither bullish nor bearish. Its unwise to be swinging really anything on SPY right now IMO, just because its still very undecided. And if you are, you are gambling. Like real, you're gambling. Unlesss you have a PUT or SPXS that you plan on holding well into 2 months or more, then you're fine, you don't worry, but anything else, meh..set your stops and be careful.
Tomorrow we will see what happens. I won't revise with the bullish or bearish break tomorrow because at the end of the day, we still have those same supports and resistances in my idea above. So we really still want to see SPY break out of the 404 to assert a short term uptrend if you are bullish or a break outside of this megaphone pattern to the downside if you are bearish. I suspect the market will decide tomorrow.
As for now, that is all!
Take care, trade safe, leave your questions/comments and criticisms below!
I am not going to post levels or math predictions, if you followed the post above, chances are you are green today if you're a day trader =) haha. Yay you! That's your weekly freebee. ;)
But also, let's just mention, I got a little scared there at the start when this kept like, bouncing off the bearish break. I was worried! Not that I wanted to see SPY bullish, but I had consistent readings across all three of my math models that SPY would NOT fall to or go below 396 during market hours today. The data was so convincing that I was super confident in my post about it and I actually bet money on it today (jumping in long on the second test of the bearish break). And if it would have fallen below, man, I would have to retire from TV because clearly I'd be an idiot who has no idea what is going on. But thankfully, I was right. =) lol. So the spamming of TV will continue.
So let's recap and predict:
SPY said a lot today without saying much.
The wonderful thing about math levels is that you can understand exactly what the stock is thinking and why certain chart patterns emerge. We see that SPY bounced right off the bearish break a couple of times and got rejected just below the bullish break at 404.By definition this is consolidation, which we can see by the doji candle. (But don't you love understanding why we have a doji candle now? And how we can actually tell for real that this was consolidation? Because SPY failed to make a bullish or bearish break and thus a doji candle results? See how it all falls together?)
This is also very much expected because we have Powell's little speech tomorrow that he wants to talk about stuff that will likely not come as any shock. I don't really know what is going on with that, don't care either. I am assuming the market does care, but I will just react to whatever the market does.
As of right now, SPY is neither bullish nor bearish. Its unwise to be swinging really anything on SPY right now IMO, just because its still very undecided. And if you are, you are gambling. Like real, you're gambling. Unlesss you have a PUT or SPXS that you plan on holding well into 2 months or more, then you're fine, you don't worry, but anything else, meh..set your stops and be careful.
Tomorrow we will see what happens. I won't revise with the bullish or bearish break tomorrow because at the end of the day, we still have those same supports and resistances in my idea above. So we really still want to see SPY break out of the 404 to assert a short term uptrend if you are bullish or a break outside of this megaphone pattern to the downside if you are bearish. I suspect the market will decide tomorrow.
As for now, that is all!
Take care, trade safe, leave your questions/comments and criticisms below!
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I like what I am seeing. I should just leave it at that, haha.
No but for real, it solidifies what my previous predictions were saying. But lets get more specific:
Sentiment:
It says absolutely we should be seeing SPY hold above 396. Those exact words. ABSOLUTELY..... Lol jk ;P, but seriously, it says its extremely strong and it doesn't anticipate us to retest this level tomorrow or drop below this level tomorrow.
Open
Very strong open predicted in the 402 range.
Bullish and Bearish Break:
It thinks SPY may find support around 400 and bounce. This makes sense. IF we open in the 402 range and it does assume a bullish break, then I would anticipate a sell down to 400 or 399 at open and then a bounce up to resume bullish momentum. That is IF it is bullish.
It also agrees with a 404 bullish break.
That's basically it. I have no more juicy tea to tell you about SPY.
I guess now we just wait till tomorrow and see what happen!
Have a good evening everyone!