Chart Courtesy of StockCharts.com

SPY Chart 9/11/16 Dip Buy
Chart Courtesy of StockCharts.com
  1. Bulls decided to exit the market Friday in mass on the highest volume since the two day Brexit move. There was no bounce, it was a gap down morning that never looked back.
  2. This move Friday was unprecedented for its speed and duration from what looked like a strong market. “Friday was the first time the S&P 500 has ever gone from within 0.5% of an all-time high one day to a new two month low the next day.” – Ryan Detrick
  3. Moves like Friday show how important it is to always be managing risk. Leverage and margin combined with stubbornness can blow up a trading account in a plunge like Friday.
  4. The MACD bearish cross continues and was one of the few warning signs before over the past few weeks before the Friday plunge.
  5. Slow Stochastics is under a bearish cross.
  6. ATR had a large spike which shows that this trading range has dramatically expanded for next week.
  7. $SPY price is now under all key moving averages except the 100 day and 200 day. The 100 day is converging near the 30 RSI and past resistance levels for a potential dip buying opportunity.
  8. The 32.90 RSI is almost oversold, the 30 RSI should provide end of day support for next week. An intra-day plunge below the 30 RSI with an end of day recovery could be a short term dip buy signal.
  9. The break so far under the Bollinger Band and extension under the 10 day EMA has stretched the rubber band of price so far the odds are that we have a meaningful snap back rally at some point next week.
  10. I will attempt to buy the dip around the $211 SPY price level, 100 day SMA, and/or the 30 RSI.