I think the general trend I am seeing in my previous post regarding a SPY relief bounce is still valid, but in need of some updates. So here you go.
May 19 we made a double bottom with the previous low on May 12, that looked nice and May 20 did indeed opened higher. But May 20 turned out to be one of the most volatile day I have seen in a while.
I'd like to call May 20 a violent shakedown day. In the process of dropping down to $380 that started in the morning and keep going on and on until 13:30 PM, I am sure many a bulls finally gave in and gave up their long positions. Now we have dipped below 384 with no sign of stopping, we are sure to be in a bear market, right? A lot of bears must have jumped in on the coveted final breakdown. But the market turned upward violently, trapping in many bears and left many bulls-in-tears behind.
On May 20, as we closed higher than the previous day, we are still technically not in a bear market. Even though the candle is a big ugly red one, it can be seen as a small green candle, with a needed shakedown done. I think we will likely gap up on Monday and keep going up to close to $399-$400 on early Wednesday.
The FED will be speaking again on Wednesday. Personally I think they might have seen that the economy and consumer spending have slowed down quite a lot and possibly will slow down the rate hike. If that happens we could see a rally up beyond $440. But in any event, I think a relief rally to $440 is quite possible.
My last post was this one, for reference purpose:
May 19 we made a double bottom with the previous low on May 12, that looked nice and May 20 did indeed opened higher. But May 20 turned out to be one of the most volatile day I have seen in a while.
I'd like to call May 20 a violent shakedown day. In the process of dropping down to $380 that started in the morning and keep going on and on until 13:30 PM, I am sure many a bulls finally gave in and gave up their long positions. Now we have dipped below 384 with no sign of stopping, we are sure to be in a bear market, right? A lot of bears must have jumped in on the coveted final breakdown. But the market turned upward violently, trapping in many bears and left many bulls-in-tears behind.
On May 20, as we closed higher than the previous day, we are still technically not in a bear market. Even though the candle is a big ugly red one, it can be seen as a small green candle, with a needed shakedown done. I think we will likely gap up on Monday and keep going up to close to $399-$400 on early Wednesday.
The FED will be speaking again on Wednesday. Personally I think they might have seen that the economy and consumer spending have slowed down quite a lot and possibly will slow down the rate hike. If that happens we could see a rally up beyond $440. But in any event, I think a relief rally to $440 is quite possible.
My last post was this one, for reference purpose:
