Last week, the debt ceiling lift was signed into law which saved the US from defaulting. All of our upside targets hit last week, and the market reacted favorably with a green week up +3.2%. With not much on the economic calendar, I doubt we move much this week, but expectations of a soft landing can keep bulls in control.
Technical Analysis:
This week
SPY
broke out to the upside of the megaphone we were watching since April. We are at a critical point in the market as we tested the top of a macro trendline dating back from September 2022.
Although I can see the market moving higher in the short term, I’d expect some corrective action in the coming weeks. Even if we head higher, we will need to build some levels of support and resistance if we do head higher.
Bulls will want to hold price above the megaphone breakout. If price can continue above last week’s high 428.74, our next level above is 429.57, with not much resistance until 433. What is more likely this week is some sort of healthy pullback before we head higher. I can see SPY coming down to test the daily gap made on Friday (422.92-423.95). If this doesn’t hold, we have a golden pocket from 420-421 where we can look for buyers to step in.
Bears will want to invalidate the golden pocket and control price action under last week’s point of control at 419.
Upside Targets: 428.74 → 429.57→ 433.07 → 436.10 → 438.08 Extended: 441.21
Downside Targets: 425.14 → 423.95 → 422.92 → 421.02 → 419.00 Extended: 416.22
Technical Analysis:
This week
SPY
broke out to the upside of the megaphone we were watching since April. We are at a critical point in the market as we tested the top of a macro trendline dating back from September 2022. Although I can see the market moving higher in the short term, I’d expect some corrective action in the coming weeks. Even if we head higher, we will need to build some levels of support and resistance if we do head higher.
Bulls will want to hold price above the megaphone breakout. If price can continue above last week’s high 428.74, our next level above is 429.57, with not much resistance until 433. What is more likely this week is some sort of healthy pullback before we head higher. I can see SPY coming down to test the daily gap made on Friday (422.92-423.95). If this doesn’t hold, we have a golden pocket from 420-421 where we can look for buyers to step in.
Bears will want to invalidate the golden pocket and control price action under last week’s point of control at 419.
Upside Targets: 428.74 → 429.57→ 433.07 → 436.10 → 438.08 Extended: 441.21
Downside Targets: 425.14 → 423.95 → 422.92 → 421.02 → 419.00 Extended: 416.22
