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 Dojis, dojis, every where. Truly some strange price action last week in the major S&P 500 index. I bought SPY puts when the price was struggling at the 50 day late Friday in the last 45 minutes and was instantly questioned and criticized on twitter for doing that on a bullish candle, minutes later the market sold off and I had a nice profit cushion going into Monday. I am glad to see plenty of bulls still out making their case that we return to all time highs gaining confidence after the quit bounce off the 100 day last week. But that is not what the chart is saying, the SPY chart is giving about every bearish/down trending signal I know of, which is very odd. This chart has lots of  technical damage to give me any long signals anytime soon. Getting and closing above the 50 day would only be step one to reverse the beginning of this down trend in my book.

 

  1. The 20 day has now crossed under he 50 day which is a short signal.

  2. The 50 day resistance has held for the past seven trading days.

  3. Three times in the past seven days the 50 day was rejected on the test.

  4. The market is range bound in the short term 50 day resistance/100 day support.

  5. The next leg of this trend will only start by a break and close beyond one of these levels.

  6. We have five straight days of doji candles where the close was very near the open, all the gains were made on the gap open and none were made during the trading day. 

  7. Thursday we had a gravestone doji candlestick signaling a top in the reversal run from the 100 day bounce. 

  8. Friday confirmed the Thursday reversal with a lower high and lower low and a sell off at the end of the day.

  9. Short term moving averages are signaling a down trend with the 5 day under the 10 day and the 10 day under the 20 day.

  10. Fridays close was under the 10 day and 20 day with both seeming to be acting as strong resistance.