So, October ended with Halloween, and its time to update the outlook for the longer term on the SPY Monthly chart.
October underwhelmed September, but it still closed on a bullish candle nontheless. So might we be expecting a follow through bounce? I think the jury is still out... and a lot pivots on what action is taken by the FOMC, as well as its outlook.
Bigger than that, zooming out to see the larger picture, a little unsettling was something eye catching - that there might have been a time in the not so far past that looked technically similar.
The monthly chart have the two time lines drawn (white dotted vertical line). Back in August 2008, while 2008 presented as a pretty bad most of the year at that point (as it did similarly in 2022), there was a sense of optimism in the air just then, despite the monthly MACD (and MACD Signal) crossing down below zero. Then the next month saw all hell break loose. The technical picture then (simplistically) appeared to have broken a supporting up trend line, had MACD and MACD Signal lines cross down below zero, and the Volume Divergence cross down its moving average.
Similarly, albeit on a larger scale, the technical outlook appears to be repeated on an amplified scale here.
Presuming that the technicals uncannily unfold similar outcome, then by projection, the downside target could be the last major low... targeted about 200 on the SPY. Yes, about half of what it is just now.
That is quite severe.
In consolation, thus far, it appears that the projections point to a likelihood of 325-330 for the time being as previously assessed.
However, if a series of black swans start to go off... then maybe, just maybe, this post will remind of where the SPY might be heading.
October underwhelmed September, but it still closed on a bullish candle nontheless. So might we be expecting a follow through bounce? I think the jury is still out... and a lot pivots on what action is taken by the FOMC, as well as its outlook.
Bigger than that, zooming out to see the larger picture, a little unsettling was something eye catching - that there might have been a time in the not so far past that looked technically similar.
The monthly chart have the two time lines drawn (white dotted vertical line). Back in August 2008, while 2008 presented as a pretty bad most of the year at that point (as it did similarly in 2022), there was a sense of optimism in the air just then, despite the monthly MACD (and MACD Signal) crossing down below zero. Then the next month saw all hell break loose. The technical picture then (simplistically) appeared to have broken a supporting up trend line, had MACD and MACD Signal lines cross down below zero, and the Volume Divergence cross down its moving average.
Similarly, albeit on a larger scale, the technical outlook appears to be repeated on an amplified scale here.
Presuming that the technicals uncannily unfold similar outcome, then by projection, the downside target could be the last major low... targeted about 200 on the SPY. Yes, about half of what it is just now.
That is quite severe.
In consolation, thus far, it appears that the projections point to a likelihood of 325-330 for the time being as previously assessed.
However, if a series of black swans start to go off... then maybe, just maybe, this post will remind of where the SPY might be heading.
