SPY looking to make a strong reversal off this MA, backtested
SPY is most likely going to see a hard reversal off it's 50 day moving average (light orange line).
Looking back to the start of the year, we can see that SPY has found strong support along it's 50SMA, with 6 observed bounces in the last 8 months.
I have drawn two lines through RSI at 52 and 41. To me these levels are a key "Zone of reversal" for SPY.
SPY daily RSI regularly encounters support at these levels, and hasn't broken below them since Nov 2020.
I have marked all major bounces or interactions at this "Zone of reversal" with vertical lines.
Our most recent reversal was a fakeout which actually found resistance at RSI 52 and sent us down to the lowest RSI support at 41 again.
We have broken the year-old ascending wedge but may find support along a new channel,
I have marked this potential new channel support with a dotted grey line.
Based on historic correlations to RSI, as well as the fact that we are sitting on the 50SMA (historic reversal) I am predicting a hard SPY bounce tomorrow or Tuesday 9/19.
Any break under RSI 40 would be a massive red flag and an exit signal.
Looking back to the start of the year, we can see that SPY has found strong support along it's 50SMA, with 6 observed bounces in the last 8 months.
I have drawn two lines through RSI at 52 and 41. To me these levels are a key "Zone of reversal" for SPY.
SPY daily RSI regularly encounters support at these levels, and hasn't broken below them since Nov 2020.
I have marked all major bounces or interactions at this "Zone of reversal" with vertical lines.
Our most recent reversal was a fakeout which actually found resistance at RSI 52 and sent us down to the lowest RSI support at 41 again.
We have broken the year-old ascending wedge but may find support along a new channel,
I have marked this potential new channel support with a dotted grey line.
Based on historic correlations to RSI, as well as the fact that we are sitting on the 50SMA (historic reversal) I am predicting a hard SPY bounce tomorrow or Tuesday 9/19.
Any break under RSI 40 would be a massive red flag and an exit signal.
Comment:
Yikes. Not my best work. It would appear our old support channel is now prepared to act as resistance.