FED´s J.Pow could not push markets higher today, instead the S&P closed slightly red today, stucking at ATHs and being rejected at 418$ repeatedly for the last days. Strong earnings pushed futures higher afterhours. Earnings could push the S&P higher for the next two days (except early profit taking occurs tomorrow).
After that: i) I expect the upper ascending wedge to break (due to a lack of novel catalysts and profit taking after earnings season) ii) and to see it correct towards the 400$ area within the next 5 to 10 days where it finds a gap to fill and support by the ascending wedge that has been built since March 2020 (due to only weakly established support areas).
Thank you.
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Trade still intact - no changes to the plan (I do not trade the SPY itself, it serves as an indicator for high beta stocks for me):
- AAPL (stock that caused most of the upgapping in SPY) sold off heavily during the day, indicating that AMZN gap tomorrow is likely to be sold off after open as well.
- No more big names to report earnings
- No known positive catalyst to come within the next days
- Big long-legged DOJI with high red volume on daily chart
-> expect heavy sell-off tomorrow
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SPY is still in cockroach mode. However, trade still intact:
- Monday was weak volume due to bank holidays in England - Ascending Wedge has been broken
-> 416$ must be broken within the next 2 days to see the described down move (if it acts as support next time, I consider the trade to have failed)