Good morning everyone! It’s a happy Monday after Easter with Good Friday off. Let’s dive into SPY analysis, shall we? We will be focusing on SPY’s daily, weekly, and monthly charts to have a clear picture of the current situation.
Looking at the daily chart, we see massive consolidation in the area between 320 and 417. This isn’t necessarily bearish or bullish, but there are a few things to note as we start the week. Firstly, we had a higher low from December to March, and then we broke out but didn’t create a higher high. Thus, we need to see around 420 on this candle’s side for the trend to continue upward. The price took off too fast and got away from the average, so it needs to come back in for it to go higher.
Secondly, we have some trend lines that we need to observe, and we see the same trend line in the weekly chart, where it’s making its presence known. We did not break out of the top of that trend line, which is not surprising as the price did not have the required room. Therefore, the price needs to come back in, and we are expecting 405 as the next big level of support below 400.
Looking at the weekly chart, we observe sideways action that has been ongoing for almost a year, with plenty of ups and downs to take money off the table. Last week, the price did not move much, which is not bearish or bullish, but it was expected. The monthly chart still shows that the price is below the monthly 20ma, and it needs to break out higher to be truly bullish, which means it needs to get above 420. This is not something that’s going to happen this week, and it’s more likely that the price will come back down to around the 390 area.
When the price gets far ahead of its average, it doesn’t have room, so it needs to pull back. However, we don’t know whether the price will pull back and hold the average weight on things to catch up and then break out more, or it will fall back down. We’re just trading trend lines, and we’re looking for the price to hit back down towards 390. That’s what we’re looking for.
So, to sum up, the SPY analysis shows that there is a lot of consolidation happening in the area between 320 and 417, and it is not necessarily bearish or bullish. The big trend is still in play, and we need to see a higher high from 420 on this candle on this side. The trend line shows that price is going to have to come back in, and we are seeing 405 as being the next big level of support down below in 400. Price could hang out in this 405 to 410 area and just be there for a while until the average catches up.
Looking at the weekly chart, we see that the sideways action has been going on for almost a year, and we had a nice big weekly candle at the end of March, but last week we didn’t see much movement. On the monthly chart, we see that price is below the monthly 20MA, and in order to be truly bullish, it needs to break out higher and get above 420. However, that is not looking likely this week, and it’s looking more like price is going to come back down to around the 390 area potentially.
In conclusion, the SPY analysis suggests that we are in a consolidation phase, and we need to see some kind of catalyst to push price higher or lower. The trend lines show that price is going to have to come back in, and we are seeing 405 as being the next big level of support down below in 400. Traders should keep an eye on the trend lines and be patient until a breakout occurs.
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