$SPY TOP 20

If only you guys knew how long I have spent this weekend analysing the SPY chart over the last 25 years, watching for repeated patterns, MA's, fake breakouts and timings, I'm a little obsessed! Either way, what a wild week it was.

Two conflicting issues right now I see, 1.) the structure has broke down from an ascending wedge, which means it is further along than a number of Tech stocks, some I uploaded yesterday, it also rejected when it momentarily broke above the blue resistance lines and has come down since and it has made consistent lower highs since the 2nd of Feb. 

And for the first time since the first week of Jan, it has ended below the 50 Day MA. 

RSI was showing a long gradual bearish move at the top and then that accelerated downward since the 2nd of Feb. The structure is also not impulsive, the waves are counting as tho they are part of a corrective wave, my 5 Subwaves in amber for Wave 1 in red, if this was a corrective wave, we should have only seen 3 SubWaves, ABC.

2.) Second issue, we just finished Friday above the 200 Day MA, having lost it at the start of Friday, this is giving bulls hope because the last few hours of a difficult week ended in the green, bulls forgot about the entire week and the macro conditions and the 200 Day MA save has kept it just on top of the down trending channel.

So What Now?

Bank of America have warned over the weekend that the next issue the financial sector may be facing is a commercial real estate default as rent and leases are approaching crucial deadline days and they are concerned that many companies will not be able to pay.

We will see how the market deals with this information tomorrow.

Back to the chart, for the bulls, I see a possible bounce for them back up to the blue line at 409, outside of the wedge which could form a right shoulder of a head and shoulders pattern, once this right shoulder is complete and it is rejected at the blue line....it comes down then, below 353 and into our bear case and into our buy zone. This is the only SHORT TERM bullish move I see for SPY and it is solely fuelled by people believing that we are starting a bull run and who are going to be caught out when the market rejects heavily and comes down.

For the rest of us, a break below the 200 Day MA, we will then be watching a break below the previous low at 380, next level is 375 and if it breaks below 375, the bull case is then invalid and we are firmly in the bear case and we can expect to see out buy zone next.