SPY: A Critical Inflection Point! (D&W charts)
In our last analysis last week, we had already identified a critical support point around $565, which is once again acting as a support, as expected. However, in the light of new evidence, we have to update the central point of the idea, and draw up possible scenarios for us to work on next.
The link to our prevous analysis on SPY is below this post, as usual.
Daily Chart (Left):
Previous Top at $574.71: This level represents the recent all-time high, which has become a point of resistance after the price failed to maintain above it.
Current Support at $565.16: The price is testing the $565.16 support area, which was previously a resistance level. It is now, for the second time, a crucial level to hold for the continuation of the uptrend. This is the most important inflection point for the SPY.
21-day EMA Support: The price is hovering around the 21-day EMA, adding more significance to this support zone. A daily close below this line could indicate a deeper pullback.
Weekly Chart (Right):
Possible Evening Star Pattern: The recent weekly candles form a potential evening star pattern, which is typically a bearish reversal signal, especially after a strong uptrend. This pattern is characterized by a small-bodied candle (potential reversal sign) followed by a bearish candle.
Key Support Areas: The first support to watch is $565.16, aligning with the daily timeframe, followed by a more significant support at $539.44 if the evening star pattern confirms.
Trend Continuation: If the pattern fails to confirm, a weekly close back above $574.71 would invalidate the bearish scenario and signal strength in the current trend.
Conclusion:
The SPY chart is at a critical juncture. The daily chart shows support holding at $565.16, which is a critical support level and inflection point for the SPY, as a break below this line could trigger a sharper sell-off. The potential evening star pattern on the weekly chart adds bearish pressure, and we should closely monitor the $565.16 level for further clues. If the evening star confirms, the $539.44 support could come into play as a downside target. For bullish continuation, holding above $565.16 and reclaiming the $574.71 level are essential.
For more detailed technical analyses and insights like this, be sure to follow my account. Your support helps me continue providing valuable content to help you make informed trading decisions.
Remember, real trading is reactive, not predictive, so let's stay focused on the key points described above and only trade when there is confirmation.
“To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.” — Jesse Lauriston Livermore
All the best,
Nathan.
The link to our prevous analysis on SPY is below this post, as usual.
Daily Chart (Left):
Previous Top at $574.71: This level represents the recent all-time high, which has become a point of resistance after the price failed to maintain above it.
Current Support at $565.16: The price is testing the $565.16 support area, which was previously a resistance level. It is now, for the second time, a crucial level to hold for the continuation of the uptrend. This is the most important inflection point for the SPY.
21-day EMA Support: The price is hovering around the 21-day EMA, adding more significance to this support zone. A daily close below this line could indicate a deeper pullback.
Weekly Chart (Right):
Possible Evening Star Pattern: The recent weekly candles form a potential evening star pattern, which is typically a bearish reversal signal, especially after a strong uptrend. This pattern is characterized by a small-bodied candle (potential reversal sign) followed by a bearish candle.
Key Support Areas: The first support to watch is $565.16, aligning with the daily timeframe, followed by a more significant support at $539.44 if the evening star pattern confirms.
Trend Continuation: If the pattern fails to confirm, a weekly close back above $574.71 would invalidate the bearish scenario and signal strength in the current trend.
Conclusion:
The SPY chart is at a critical juncture. The daily chart shows support holding at $565.16, which is a critical support level and inflection point for the SPY, as a break below this line could trigger a sharper sell-off. The potential evening star pattern on the weekly chart adds bearish pressure, and we should closely monitor the $565.16 level for further clues. If the evening star confirms, the $539.44 support could come into play as a downside target. For bullish continuation, holding above $565.16 and reclaiming the $574.71 level are essential.
For more detailed technical analyses and insights like this, be sure to follow my account. Your support helps me continue providing valuable content to help you make informed trading decisions.
Remember, real trading is reactive, not predictive, so let's stay focused on the key points described above and only trade when there is confirmation.
“To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.” — Jesse Lauriston Livermore
All the best,
Nathan.
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