This is the same chart I posted on 9/5, and it has played out well. On 9/7 we had a 50% retrace and hit target D, bouncing slightly on Friday to close at 445.52. Progression along the upward arrow on Monday would be very bullish, and it is very possible given the lightened up volume profile upwards along the arrow.
However, I am seeing a downward bias for these reasons:
SPY did not close above the pivot of 446.18 set on Thursday, so we cannot say that the recovery from Thursday's selloff is complete. The pivot from Thursday also sits right at a key doji set back in July (circled).
RSI (9) sits just under 50, and longer term remains "trend down".
RSP, or equal weight SPX is under-performing SPY and indicates continued lack of breadth. Any push upward in SPY is going to need some help from the big boys.
DXY likely continues up Monday, topping out on Monday or shortly afterward.
Forecast:
Whether we sell early or sell late, I do not see a close above the key pivot of 446.18 at the moment. In that case, the outlook remains bearish. A break below (D) to around 443 would be bearish and would set up for a new target of the 23% fib retrace at 440.85. That would be 4.67 SPY points or roughly 46.7 points on the SPX, not out of the question.
If this assessment is wrong, then we should ramp up to re-test (C) around 451 and I will admit makng a bad call.
However, I am seeing a downward bias for these reasons:
SPY did not close above the pivot of 446.18 set on Thursday, so we cannot say that the recovery from Thursday's selloff is complete. The pivot from Thursday also sits right at a key doji set back in July (circled).
RSI (9) sits just under 50, and longer term remains "trend down".
RSP, or equal weight SPX is under-performing SPY and indicates continued lack of breadth. Any push upward in SPY is going to need some help from the big boys.
DXY likely continues up Monday, topping out on Monday or shortly afterward.
Forecast:
Whether we sell early or sell late, I do not see a close above the key pivot of 446.18 at the moment. In that case, the outlook remains bearish. A break below (D) to around 443 would be bearish and would set up for a new target of the 23% fib retrace at 440.85. That would be 4.67 SPY points or roughly 46.7 points on the SPX, not out of the question.
If this assessment is wrong, then we should ramp up to re-test (C) around 451 and I will admit makng a bad call.