Big Breakdown in The S&P 500! Here's What's Next! (SPY)
Hi friends! Welcome to this update analysis on the S&P500, via the SPY ETF! Let's get right to it!
Looking at the daily SPY chart, you can see that the spy has broken down from the head and shoulders formation that I covered in my last SPY analysis, with perfect precision! Now that the head and shoulders has broken down, one of two things are going to happen. Either the market will continue to fall during tomorrow's session, or price could rally back up to the neckline of the head and shoulders pattern, confirm it as resistance, and then head lower. Regardless, this is a clear breakdown, and lower prices are very likely to be in the cards. Ultimately, even if SPY trades back up toward the neckline of the head and shoulders pattern, the major downside target is the bottom of the uptrend channel. That's about 10% below where we are now. As you can see, the dashed red vertical trendline on the chart is a measurement of the head height. When that is subtracted from the breakdown point, it projects a fall to (guess where) the bottom of the uptrend channel. haha So, I think it is very likely that we will see a fall to around 230, especially if the Fed rises interest rates this month.
On the chart, we can see that the sell volume was above average, which gives credibility to this breakdown. Additionally, the MACD momentum is plummeting to the downside. The MACD has been printing a bearish divergence, and there is a lot of downside potential for sell-side momentum to accelerate.
Ultimately, I believe that the top is in for the bull market (as I've said before) and I believe that we're now entering the beginning stages of a new bear market, in US stocks. So, keep an eye out for strong continuation selling in the coming sessions.
Happy Holidays Everyone, and good luck trading!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Looking at the daily SPY chart, you can see that the spy has broken down from the head and shoulders formation that I covered in my last SPY analysis, with perfect precision! Now that the head and shoulders has broken down, one of two things are going to happen. Either the market will continue to fall during tomorrow's session, or price could rally back up to the neckline of the head and shoulders pattern, confirm it as resistance, and then head lower. Regardless, this is a clear breakdown, and lower prices are very likely to be in the cards. Ultimately, even if SPY trades back up toward the neckline of the head and shoulders pattern, the major downside target is the bottom of the uptrend channel. That's about 10% below where we are now. As you can see, the dashed red vertical trendline on the chart is a measurement of the head height. When that is subtracted from the breakdown point, it projects a fall to (guess where) the bottom of the uptrend channel. haha So, I think it is very likely that we will see a fall to around 230, especially if the Fed rises interest rates this month.
On the chart, we can see that the sell volume was above average, which gives credibility to this breakdown. Additionally, the MACD momentum is plummeting to the downside. The MACD has been printing a bearish divergence, and there is a lot of downside potential for sell-side momentum to accelerate.
Ultimately, I believe that the top is in for the bull market (as I've said before) and I believe that we're now entering the beginning stages of a new bear market, in US stocks. So, keep an eye out for strong continuation selling in the coming sessions.
Happy Holidays Everyone, and good luck trading!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-