Here we are pushing up against resistance levels in the $SPY. The options here are sideways, a correction, or we go parabolic. The odds favor sideways action here in a $174/$176 range, the probabilities change as one of these key areas are breached and held. That last dip to the 100 day shook out a lot of bears and weak hands relieving a lot of selling pressure. The “Buy the dip” crowd is back in full force just waiting to get in at any good opportunity. Many professional equity money managers are likely desperately seeking Alpha and in danger of under performing the S&P 500 index this year and need to play catch up. The environment as it stands now is very bullish. The most hated bull market in history continues to baffle those trading on their own personal opinion of “It just can’t go any higher.”

  1. $SPY is currently in a six day price range.
  2. $176 is resistance and a close above this level will signal more upside.
  3. $174 is short term support and where “buy the dip” traders have been stepping in, a close below this level will be a sign the up trend has stalled. This is where my end of day stop is currently from my long positions I entered at the end of day October 10th.
  4. For twelve days the 5 day ema has held as support, this is the sign of a very powerful uptrend.
  5. The gap low from October 17th has held as support.
  6. We are still above the triple top thirteen year break out in the $SPY.
  7. The RSI is 68 and 70 RSI has been a ceiling for most of the year. High probabilities that the uptrend does slow down here.
  8. $SPY needs to consolidate here for a more healthy price base before it goes higher.
  9. Options are very bullish with huge open interest in at the money put options and little open interest in out of the money call options. The $178 weekly calls delta probabilities at less than 15% that we see $178 this week. The majority says down, so the majority is probable already out in cash relieving selling pressure.
  10. The StockTwits $SPY sentiment is 48% bullish 52% bearish which is not what an overheated bull market looks like. Retail traders are leaning bearish.

 

Ten Facts About the $SPY Chart

Ten Facts About the $SPY Chart