Past Price Movement Analysis
SPY is currently moving within a broadening range to the downside apart an overall corrective wave. SPY recently broke the previous structural high at $406, creating a higher high and making its third rejection at $431.71 off of the major resistance line of the broadening range (solid white line). Following this rejection, SPY then broke back below the 200 EMA and retraced to the 61.8% fibonacci level from the June 17th lows of $362.17. The 61.8% fib retracement was also in confluence with the current uptrend support line (dotted blue line), making it its third bounce from that line.
Future Price Movement Analysis
Currently SPY is touching the resistance line (dotted white line) of a mini down trend and consolidating within a mini pennant in addition to consolidating in a larger pennant.
If SPY breaks above the mini pennant (white dotted line) and the pivot point zone, it can make its way back to the resistance line of the broadening range and retest again in hopes of breaking it this time. If there is a break, SPY will retest the previous higher high at $431.71 and possibly make its way back towards all time highs.
If SPY breaks below the mini pennant (blue dotted line), we could see a move back down to the current higher low of $388.42, creating a possible double bottom or a move further below back to those June 17th lows of $362.17. This would either create a massive double bottom within this broadening range or it breaks below $362.17 for another trigger towards recession prices.
Elliott Wave Analysis
January 4th (Top most red circle) marked the beginning of the corrective Elliott wave cycle on SPY (WAVE 1). July 17th (Bottom most red circle) marked the ending the corrective Elliot wave on SPY (WAVE 5). (NOTE: The completion of wave 5 at $362.17 was in confluence with the 50% fibonacci retracement between the low of $211.11 to the high of $476.44. It was also in confluence with the 200 EMA on the weekly chart.) Following the completion of wave 5, SPY consolidated before beginning its move up to complete wave 1 of the new overall wave sequence. The completion of wave 1 at $431.71 created the first higher high of the new sequence to begin an uptrend (upper green circle). The completion of wave 2 at $388.42 created the first higher low of the new sequence (lower green circle). Note that SPY could still be moving within wave 2. Monitor accordingly.
Disclaimer: This is not financial advice and I am not a financial advisor. The information listed is only for educational purposes and should not be used to make any financial decisions.
SPY is currently moving within a broadening range to the downside apart an overall corrective wave. SPY recently broke the previous structural high at $406, creating a higher high and making its third rejection at $431.71 off of the major resistance line of the broadening range (solid white line). Following this rejection, SPY then broke back below the 200 EMA and retraced to the 61.8% fibonacci level from the June 17th lows of $362.17. The 61.8% fib retracement was also in confluence with the current uptrend support line (dotted blue line), making it its third bounce from that line.
Future Price Movement Analysis
Currently SPY is touching the resistance line (dotted white line) of a mini down trend and consolidating within a mini pennant in addition to consolidating in a larger pennant.
If SPY breaks above the mini pennant (white dotted line) and the pivot point zone, it can make its way back to the resistance line of the broadening range and retest again in hopes of breaking it this time. If there is a break, SPY will retest the previous higher high at $431.71 and possibly make its way back towards all time highs.
If SPY breaks below the mini pennant (blue dotted line), we could see a move back down to the current higher low of $388.42, creating a possible double bottom or a move further below back to those June 17th lows of $362.17. This would either create a massive double bottom within this broadening range or it breaks below $362.17 for another trigger towards recession prices.
Elliott Wave Analysis
January 4th (Top most red circle) marked the beginning of the corrective Elliott wave cycle on SPY (WAVE 1). July 17th (Bottom most red circle) marked the ending the corrective Elliot wave on SPY (WAVE 5). (NOTE: The completion of wave 5 at $362.17 was in confluence with the 50% fibonacci retracement between the low of $211.11 to the high of $476.44. It was also in confluence with the 200 EMA on the weekly chart.) Following the completion of wave 5, SPY consolidated before beginning its move up to complete wave 1 of the new overall wave sequence. The completion of wave 1 at $431.71 created the first higher high of the new sequence to begin an uptrend (upper green circle). The completion of wave 2 at $388.42 created the first higher low of the new sequence (lower green circle). Note that SPY could still be moving within wave 2. Monitor accordingly.
Disclaimer: This is not financial advice and I am not a financial advisor. The information listed is only for educational purposes and should not be used to make any financial decisions.
Comment:
On 9/15/22 the market closed creating that double bottom at $388, fulfilling part of the analysis. This morning that double bottom has been broken below with a gap down in pre-market. The question is do we fill the gap in the red zone, completing wave 2 (or wave C) then start making our way back to the major resistance of the broadening pattern? Or do we continue lower to retest that supply zone near $362?
Comment:
SPY has finally arrived to the June 17th, 2022 lows. At the close of day on 9/23/22, SPY formed a hammer candle on the daily timeframe right atop the demand zone. On the weekly, SPY hovers closely above the 200 day moving average. Also, I have noticed that SPY has a MACD crossunder on the weekly timeframe. In contrast, there is a possible bullish divergence forming on the weekly timeframe.
As far as Elliott Wave goes, we may have just completed wave 1 of Wave C of the overall (ABC) corrective wave that began at the beginning of the year.
As stated, this is a HHUUUGGEEE level to watch. With Friday, 9/23/22 closing with a hammer candle, I am watching for a bounce here to begin corrective wave 2 within Wave C of the overall (ABC) corrective wave that began at the beginning of the year.
Let's see what happens :)
As far as Elliott Wave goes, we may have just completed wave 1 of Wave C of the overall (ABC) corrective wave that began at the beginning of the year.
As stated, this is a HHUUUGGEEE level to watch. With Friday, 9/23/22 closing with a hammer candle, I am watching for a bounce here to begin corrective wave 2 within Wave C of the overall (ABC) corrective wave that began at the beginning of the year.
Let's see what happens :)
Dennis Butler Jr.