SPY at Key Resistance
Diupdate
So yesterday was the best performing day we've seen in almost a month.
This move comes after the SPY broke below the green line (support), and subsequently found new support at the 100 day MA/June Peak (around 320). We're at/just below the green line (which is now acting as resistance).
Note: According to Spotgamma, there is a gamma "wall" at 341 (exactly at the current green line resistance), which if broken, could mean increased buying above this level. The opposite goes for the 335 level, which would see increased selling below that level. If the green line holds up as resistance today/tomorrow, we may see a retest of the 50 day MA, before we break below, and see a continuation of the downtrend toward the 100 & 200 Day MAs, and possibly the neckline at 300 in the near term. This would complete the head in head-and-shoulders pattern I'm observing.
I don't believe we'll see a breach of the green line to the upside. If we do, I suspect it will be short lived as it would imply a continuation of the bullish trend (risk-on) heading into the election, which is less than a month away. Also, don't forget about earnings next week. This could be a historically volatile month and quarter imo so stay tuned.
I appreciate your time today guys and good luck. Thanks, Michael.
Other things to note today:
- Powell may give us another convincing dovish performance when he addresses the NABE Conference in Chicago at 10:40am.
- JOLTS Job Openings at 10am (est 6,500)
- Trade balance came in at -66.2B at 8am today. Worse in 14 years.
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The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research.
This move comes after the SPY broke below the green line (support), and subsequently found new support at the 100 day MA/June Peak (around 320). We're at/just below the green line (which is now acting as resistance).
Note: According to Spotgamma, there is a gamma "wall" at 341 (exactly at the current green line resistance), which if broken, could mean increased buying above this level. The opposite goes for the 335 level, which would see increased selling below that level. If the green line holds up as resistance today/tomorrow, we may see a retest of the 50 day MA, before we break below, and see a continuation of the downtrend toward the 100 & 200 Day MAs, and possibly the neckline at 300 in the near term. This would complete the head in head-and-shoulders pattern I'm observing.
I don't believe we'll see a breach of the green line to the upside. If we do, I suspect it will be short lived as it would imply a continuation of the bullish trend (risk-on) heading into the election, which is less than a month away. Also, don't forget about earnings next week. This could be a historically volatile month and quarter imo so stay tuned.
I appreciate your time today guys and good luck. Thanks, Michael.
Other things to note today:
- Powell may give us another convincing dovish performance when he addresses the NABE Conference in Chicago at 10:40am.
- JOLTS Job Openings at 10am (est 6,500)
- Trade balance came in at -66.2B at 8am today. Worse in 14 years.
If you like our analysis, please hit the Like button and subscribe to our profile so you don't miss our new analysis and updates.
The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research.
Catatan
Green line resistance is holding up nicely. We had a small but notable sell off down to about 339, right around when Jerome Powell was scheduled to speak. I suspect he wasn't dovish enough...Catatan
Struggling for direction at the moment. Looks like we just had a small rally back above the 340 level. Tight range today. Small caps are roaring higher, Russell up 1.8%. Tech down on the tech break-up news, maybe a rotation out of big tech and into small caps. Dollar flat, Bitcoin Flat, 10Y up 2% at .777. Market seems quiet today.The bulls are still looking at the 341 level, and want to break back above the Green line to take back the trend. The Bears need to get back below the 50 day MA, to keep the downtrend hypothesis alive. Don't forget, we could trade sideways for a period also. Let's see how the afternoon plays out, and if bulls can hold on to the 50 day MA support at 336.
Catatan
Decent rally across the board as of mid-afternoon, all the majors are now green, and the bulls have successfully gotten us back above the Green line (marginally), but volume is weak. We're sitting at 342.12 at the moment. Let's see if the bulls can hold it.Catatan
And just like that all the majors are back red, and vol is spiking. We're back below the Green resistance line again, and sitting at 337. No clear catalyst as yet for the sell off, as far as I know. But, Cuomo is giving a press briefing on the state of Covid-19 in NY as we speak, and by the look of things, it doesn't seem to be going very well. Stay tuned..Catatan
We've now broken below the 50 day MA at 336.27, and are sitting at 335. Looking very bearish for power hour heading into the close.Catatan
It looks as though the catalyst for the sell-off was Trump saying he halted stimulus talks until after the election.Catatan
10Y yield is tanking, back down to .74 from .777 earlier on. US Dollar is rallying as investors liquidate stocks. Now up 0.27%.Catatan
There you have it folks! Ugly close today across the board. The majors all closed down over 1% after being up almost 1% earlier on in the day. SPY closed below the Green line resistance and 50 day MA, and just above the 21 day EMA. After Trump's update on negotiations, the bulls were not able to re capture those key levels before the close. They remain resistance. 10Y yields fell to .74, Vol spiked up to it's 200 day MA, and kissed 30 briefly before simmering back down just below. As expected, the downward trend is still intact. Until tomorrow, my friends. Have a great evening, and cheers! Michael
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