TNasr

SPY is playing Fibonacci Pinball

AMEX:SPY   SPDR S&P 500 ETF TRUST
Dear all, as you can see from the yellow lines SPY is in an ascending wedge (I cut through some candlesticks b/c RSI was extremely high on those days) that is part of an upward channel the index has been in since the low in early May. Since that low we've made 3 higher highs and 3 higher lows, bullish right? Maybe not. You see on Mar. 13 we made a higher high than the one struck on Feb. 27 only to fall hard over the next couple weeks. For all we know this ascending channel is just a bear flag . Also note that we recently broke RSI support (denoted with a green arrow) that had held since April trend wise.

The most important takeaway from the past few weeks; from Jun. 11 specifically, is that the .786 (279.55) Fibonacci level has served like a glass ceiling, and the 0.618 (273.82) has currently served as strong support, cumulatively this has happened about 6 times in less than 2 weeks. Even if we do break past the .786- 282, where multiple bearish factors of confluence come into play, will probably be the limit of any upside (based on analysis not present here) before a retracement.

We've made 3 higher lows in the ascending channel we've been in since the beginning of April and on every higher low volume relative to the last one has been lower- denoted by four opaque oval ellipticals at the bottom of the chart connected by downward sloping magenta trend lines . This is potentially bullish . Thus at the moment patience is required, I am currently neutral and will see how the market behaves over the coming weeks before moving into the bullish or bearish camp.

Thanks for reading! Please leave comments if you have questions, criticisms, or found this interesting.

Comments

very nice observations
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TNasr Kuan-Yin
@Kuan-Yin, Thanks
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