649bruno
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S&P 500 (SPY): The Last Man Standing? Evidence Says Yes.

AMEX:SPY   SPDR S&P 500 ETF
119 1 6
13 days ago I published the above bearish bat formation for the S&P 500             , using the SPY             as its proxy. The following is part of what I wrote: "The S&P             500-0.14% (also SPY-1.20% ) recently completed a Bearish BAT pattern on a one day time duration. This is a possible 2618 trade, with the 2.618 level being approximately 1867 (on the S&P             500-0.14% ) as a meaningful target level. This would also be a .786 Fibonacci retracement (of the X to A impulse leg)."

Since this was published, worldwide markets have been very weak. Japan has sold down deeply, and European markets are down as much as 9% for 2016. This raises the question "Will the markets in Europe and Japan catch UP (rise) to the S&P 500             , or, will SPY             ( S&P 500             ) fall, and catch the weakness with much of the rest of the world"? I think that the S&P             will sell down. I think the S&P 500             ( SPY             ) is the "last man standing". Here is why:
The SPY             has failed to put in new highs (just as the DOW 30 has failed to put in new highs). SPY             is making lower lows. (This defines a bear market). THE TRANSPORTS ARE ALSO SELLING DOWN. In the chart above, the Ichimoku Cloud is drifting lower. The failed sideways trend since point D in the bearish bat is showing that SPY             is trading into the thick red "conversion" line of the cloud. Please note the dotted circles to the far right at $203.95. These are the "teeth" in an alligator trade. The blue line above (the teeth) and yellowish line below (the teeth) are the lips and jaws of the alligator .. They are now "closing", which suggests an end to trend (the alligator is going to sleep). All three indicators (above the chart) are sagging, which is bearish . I think when the alligator "wakes up and starts to feed" (and the blue and yellowish line separate) the new trend will be lower. If the S&P 500             breaks the 200 day moving average at approximately 2015, I feel we will have a 2618 trade down to 1867. If we fail there then look for a retest of 1812, which I think will fail. If the S&P             fails at 1812, then those who claim we are in a large trading range will be proven wrong. As the late, great Ed Hart would say: "We will all know in the fullness of time". I hope this presentation has been informative and helpful.
Yours for better trading, Don.
Thank you for the detailed, well thought out textual analysis to complement the chart itself. A rarity on tradingview.com Too many just post a complex chart and leave everyone guessing as to what it really says. There is always a back story to every chart.
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