SPY is now trading below its lowest trend support line since in 3 months. This is occurring as RSI plummets. We will need to watch how price action correlates with RSI trends.
SPY has showing a trend of testing its support line and even trading below it over the past weeks. To add on to this, the RSI is now indicating it is over bought. Repeatedly testing the support line with an overbought RSI means this upward trend is closing. We should expect a change in the trend to a bearish sentiment soon.
We can see that SPY is starting to trade in bearish territory by repeatedly testing its line of support and even trading below on multiple occasions lately. Keep a close on this growing pattern as this latest rally is loosing steam.
After forming a bullish wedge pattern yesterday, we see that upward breakout occurred with a rally in the early morning hours. This currently puts the stock price back into its longer term trading range. Its best wait the day out see what smart money thinks tomorrows direction will be.
With the SPY trading below its recent trend past its line of support, it created a new bullish signal of a broadening wedge. It is completing this pattern with the 4th point (2 points on each side), so we could be seeing a breakout in an upward direction.
We can see from the trend over the past 2 months that SPY is now passing below its current support and re-testing a new lower support defined in late Dec and early January. At this point its quite undecided which way the market wants to go as the days have opened to much selling followed gains in the later day that attempt to bring us back to previous close....
As the Bull Trap comes to a close, it reveals itself to what it really is. The most prominent selling does not occur until noon ET which is a strong indication, the smart money feels the down trend is the new direction. By monitoring price action through out the day, we will get an even better idea towards the end of the trading day when the smart money will...
Stocks are mixed with indicies and ETFs crossing the trend line to denote a change in the bull trap trend the market has signaled lately. Selling volume has also increased at a higher pace than compared to buying volume we were seeing during the recent upward trend further indicating a down ward trend is likely.
Although the charts showing bearish narrowing wedges in the price action and RSI, we saw a breakout in an upward direction. To identify the strength of the breakout, we look to the volume and see that it has quite low buying volume indicating this upward trend does not have much steam and will reverse course down ward soon.