While this 2y old broadening wedge is considered busted when using straight lines, you can always use parabolas to make minute fitting-adjustments in order to see where it's headed short-term. What you'll most likely see is a so called "late bust". When formations bust, they usually bust and reverse course right away. Some formations bust late and just appear to breakout creating either a double-top reversal, an inverted vV-reversal, or an adam & eve reversal (and a few other possibilities which are unlikely).
For the time being SPY is clearly bullish. All you have to look for is a breakout above parabola 'X' and a 'weekly' candle close above that line. Once this is out of the way it is highly likely to reach for levels of 320-335 and a maximum technical possibility of 390 (extremely unlikely since the formation is busted).
Now, closing above parabola 'X' would mean that the broadening wedge has ended, any formation (maximum 6-8 months old) that is built above that line (or trend line 'A' respectively), will ultimately decide the next "big move". This move, if downward, will have a loss-of-value potential of at least 18% (measured A to B), and 33% or more for a greater move (measured A to C). You should do your own study on how these formations usually reverse after a bust. Not the drawn-up charts, but the actual busted wedges. I've experienced some of them busting all the way below the lower trend line in one go, not kidding.
This chart is valid until mid next year, and when trading below 340. Remember, parabola 'Z' and below is your strong-sell signal. In a few weeks and a few more candles, we'll be able to look forward more precisely.
(Lines A and C are parabolas and not straight. The pink-dotted line is the 136MA (average of 20/50/200). Connections have been averaged on step-line over log for greater precision)
For the time being SPY is clearly bullish. All you have to look for is a breakout above parabola 'X' and a 'weekly' candle close above that line. Once this is out of the way it is highly likely to reach for levels of 320-335 and a maximum technical possibility of 390 (extremely unlikely since the formation is busted).
Now, closing above parabola 'X' would mean that the broadening wedge has ended, any formation (maximum 6-8 months old) that is built above that line (or trend line 'A' respectively), will ultimately decide the next "big move". This move, if downward, will have a loss-of-value potential of at least 18% (measured A to B), and 33% or more for a greater move (measured A to C). You should do your own study on how these formations usually reverse after a bust. Not the drawn-up charts, but the actual busted wedges. I've experienced some of them busting all the way below the lower trend line in one go, not kidding.
This chart is valid until mid next year, and when trading below 340. Remember, parabola 'Z' and below is your strong-sell signal. In a few weeks and a few more candles, we'll be able to look forward more precisely.
(Lines A and C are parabolas and not straight. The pink-dotted line is the 136MA (average of 20/50/200). Connections have been averaged on step-line over log for greater precision)
