SPY/SPX has been holding an uptrend that began back in August 2011. This uptrend was the beginning of a very long bull market that has lasted for 10+ years now.
After forming this uptrend, SPY/SPX broke out of range which previously created huge double tops in the market between the years 2000 and 2007.
Since then, SPY/SPX has since tested this uptrend support 3 times (2016, 2019, and 2020). Note that there was a brief break below this line in 2020 creating a fake-out before reclaiming this longstanding uptrend support.
After the 2020 lows and test of this uptrend support line, SPY/SPX became extremely bullish, skyrocketing to $472.32/$4824.53 respectively. After hitting these all-time highs, SPY/SPX began a bear market retracement after creating and lower higher on the weekly chart around march/April 2022. This lower high was the beginning of a year-long downtrend. This bear market downtrend has tested resistance twice since then, 1st around august 2022, and again between late November and early December.
SPY/SPX ultimately hit a low of $356.52/$3491.58 during the 2022 bear market. This low was in confluence with the 50% Fibonacci retracement that was used by marking the low of 2020 and the high of 2022.
Currently, SPY/SPX has been consolidating hard while the market awaits the next CPI report and FOMC meeting. There was potentially a higher low formed in late December which could be the beginning of the new uptrend. There was also a brief higher high formed back on August 2022, followed by a lower low in October 2022.
Projections:
Looking at the weekly chart, many possible scenarios are present with current price action and chart patterns currently present. There’s an overall falling that we are still trading in right now, a larger megaphone pattern from the higher high and lower low formed between August 2022 and October 2022, and there is also a possible rising wedge forming if SPY/SPX holds this new higher low that it has created.
Subjectively I feel that SPY/SPX could make a move for a retest of those all-time highs, ultimately creating a Hugh double top as it did in the early 2000s. I think it follows the new uptrend into the rising wedge and break below the rising wedge after retesting all-time highs again, forming a new downtrend back down to the overall uptrend support line created back in 2011. I believe it then consolidates in a range and trades sideways between the highs and lows of 2022 before creating an ascending triangle from the overall trending and resistance of 2022 all-time highs.
Some other possible outcomes are that it breaks below this new higher high formed in late December 2022, and retests the lows of 2022 before either creating a double bottom or breaking the lows of 2022 to continue trading in the falling wedge created by the 2022 bear market that will ultimately take it back to the overall uptrend support line before making that big recover to the upside.
Whatever happens next, stay ready, control your risk, control your emotions, and trade/invest accordingly.
After forming this uptrend, SPY/SPX broke out of range which previously created huge double tops in the market between the years 2000 and 2007.
Since then, SPY/SPX has since tested this uptrend support 3 times (2016, 2019, and 2020). Note that there was a brief break below this line in 2020 creating a fake-out before reclaiming this longstanding uptrend support.
After the 2020 lows and test of this uptrend support line, SPY/SPX became extremely bullish, skyrocketing to $472.32/$4824.53 respectively. After hitting these all-time highs, SPY/SPX began a bear market retracement after creating and lower higher on the weekly chart around march/April 2022. This lower high was the beginning of a year-long downtrend. This bear market downtrend has tested resistance twice since then, 1st around august 2022, and again between late November and early December.
SPY/SPX ultimately hit a low of $356.52/$3491.58 during the 2022 bear market. This low was in confluence with the 50% Fibonacci retracement that was used by marking the low of 2020 and the high of 2022.
Currently, SPY/SPX has been consolidating hard while the market awaits the next CPI report and FOMC meeting. There was potentially a higher low formed in late December which could be the beginning of the new uptrend. There was also a brief higher high formed back on August 2022, followed by a lower low in October 2022.
Projections:
Looking at the weekly chart, many possible scenarios are present with current price action and chart patterns currently present. There’s an overall falling that we are still trading in right now, a larger megaphone pattern from the higher high and lower low formed between August 2022 and October 2022, and there is also a possible rising wedge forming if SPY/SPX holds this new higher low that it has created.
Subjectively I feel that SPY/SPX could make a move for a retest of those all-time highs, ultimately creating a Hugh double top as it did in the early 2000s. I think it follows the new uptrend into the rising wedge and break below the rising wedge after retesting all-time highs again, forming a new downtrend back down to the overall uptrend support line created back in 2011. I believe it then consolidates in a range and trades sideways between the highs and lows of 2022 before creating an ascending triangle from the overall trending and resistance of 2022 all-time highs.
Some other possible outcomes are that it breaks below this new higher high formed in late December 2022, and retests the lows of 2022 before either creating a double bottom or breaking the lows of 2022 to continue trading in the falling wedge created by the 2022 bear market that will ultimately take it back to the overall uptrend support line before making that big recover to the upside.
Whatever happens next, stay ready, control your risk, control your emotions, and trade/invest accordingly.
Dennis Butler Jr.