SPY on a sustained bounce?
Last week's SPY action was again interesting, in another new way. But before getting into the details, what is not shown here is the Monthly SPY chart, and in that chart, October is the Perfected TD Sequential 9th candle of the Buy Setup. This suggests that within the next three months, a TD Flip (in the form of a shorter term uptrend) and Sequential is an increasing probability. the SPY is also around the Monthly 55EMA (indicated by the purple support line), which has been tested at least once in the last couple of months.
The SPY Weekly chart shows the extended 8th candle of the TD Sequential with a long lower tail, and last week's candle broke the TD Sequential Setup with the start of an opposing candle. It had bounced off the Monthly 55EMA level, and candlestick formation suggest that an uptrend attempt is underway. While there is a lack of a weekly higher low, there is a slight MACD bullish divergence noted. Therefore, this bounce rally just might have some legs.
The daily chart is a bit messy, as it accentuates the situation where a second attempt to rally up with a new TD Sequential Setup is met with many resistances. Favourable to the upside, having closed two gap up and reopened one gap down (Thursday's post), Friday's closing week action reversed the week's expected outlook, and with style in the form of a relatively solid bullish candle. MACD is supportive of the price action, and 380 is the next confluence of resistance that needs to be overcome. Noted that the downtrend pattern appears to have deviated, so one of three things is likely:
1. The downtrend is broken, resistance will be met and broken too, and a trend reversal should be in effect;
2. The resistances will hold at a out 380, and a reversal would happen to bring a lower low; and
3. A sudden event reverses and reinstates a strong move to the downside target.
Right now, I am just watching this deviation as it continues to surprise in its development... nothing explicit at this point, so maybe a (real) walk in the park just might be needed.
The SPY Weekly chart shows the extended 8th candle of the TD Sequential with a long lower tail, and last week's candle broke the TD Sequential Setup with the start of an opposing candle. It had bounced off the Monthly 55EMA level, and candlestick formation suggest that an uptrend attempt is underway. While there is a lack of a weekly higher low, there is a slight MACD bullish divergence noted. Therefore, this bounce rally just might have some legs.
The daily chart is a bit messy, as it accentuates the situation where a second attempt to rally up with a new TD Sequential Setup is met with many resistances. Favourable to the upside, having closed two gap up and reopened one gap down (Thursday's post), Friday's closing week action reversed the week's expected outlook, and with style in the form of a relatively solid bullish candle. MACD is supportive of the price action, and 380 is the next confluence of resistance that needs to be overcome. Noted that the downtrend pattern appears to have deviated, so one of three things is likely:
1. The downtrend is broken, resistance will be met and broken too, and a trend reversal should be in effect;
2. The resistances will hold at a out 380, and a reversal would happen to bring a lower low; and
3. A sudden event reverses and reinstates a strong move to the downside target.
Right now, I am just watching this deviation as it continues to surprise in its development... nothing explicit at this point, so maybe a (real) walk in the park just might be needed.
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