SPY-Bull Trap? for AMEX:SPY by PipMiesterStronger

So far it looks like a nice rejection on the perfect opportunity to make a breakout. This market is really trying to trick everyone.. C'est la vie.

My previous post had the multiple updates, and I included a particular moment when we wicked down, but were bought back up while near the Red Danger zone. This was the area that needed to hold on the small timeframes, and the wick didn't have strong volume coming in. You can see from the last update on my last post, that this is what tipped my hat to knowing this thing will probably crumble. (Please see related Idea below and scroll to the bottom of the many updates) Now we have support coming in at 281, once that breaks the markets will deflate. I can see us staying within a range for the next few weeks between 271.5 - 281. This could last for who knows how long.. 2 months ... 2 weeks... 2 days. I am not sure.

On the smaller time frames, we see a nice volume bar coming in when we hit 281, this will be our local bottom and a great place to use for entries or exits as the volume confirms its significance.

The rejection of the breakout today has not been confirmed, but will be confirmed if we close the day below the highs, and more specifically I like the 281 level for now. Until that breaks expect more chop.

After that breaks next major support will be our Larger Time Frame Ranges of 282-271.5.

Give a like if you want more minute by minute updates.

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Nothing has really changed yet on this chart. Although, sell side volume is picking up but not spiking up. This tells me that a break of this small time frame support could be close 281.12

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When it Breaks we might be confined to a larger Bull Flag, that I have drawn here.

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Disclaimer: Though I am a very biased bear. It would be quite irresponsible of me to only post my opinion. This chart is a bull flag/ pennant type formation at this point, we haven't gotten the impulses down yet and if we break through my "Danger Zone" areas it would be very Responsible to manage risk there. Take off shorts or put on longs as we stay above those levels. I wanted to make sure I provided this side of the argument because with charting there are always 2 sides to the coin.

Currently, Price is trying to escape the bounds of this flag pattern. Let's carefully watch what happens at this very critical area.

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We broke above the small TF Bull Flag Trendline. Let's see if we get the followthrough. Watch Volume closely on a 3 or 5 min chart

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Rejected

Watch the two Boxes of Importance. Danger zone, risks bullish impulses breaking very significant resistance which will potentially lead us back to near yearly highs (286 or 290 resistance)... A break below "Happy Place" signifies the likelihood of falling back into the consolidation zone with 282 and 271.5 as our Medium TF range.

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Market Wrap
QQQ - Show signs of closing below its H&S (not the prettiest H&S, but still valid)

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Russell 2000- on the other hand, has not broken its neckline as of yet.

Both of these broad market ETF's are easily poised to break these structures, at any moment, in fact, I wouldn't be surprised if it all happens tonight in the futures, with a gap down open.

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I have readjusted the Bull flag pattern for where we found a little support today. Right now we are testing for a breakout *(up) of the bull flag pattern. Bull flag patterns are continuation patterns, but I am still expecting a reversal. That doesn't mean a reversal will happen. We want to watch the volume signatures and look for a throwback if it does get above the bull flag trendline. I will be particularly interested in the Horizontal Danger zone breaking for more evidence of a bullish implulse. We have already gotten a decently high volume candle on the small tf's, possible topping volume. This red tick also makes this look like a rejection, lets see what happens.

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Attempting breakup. We want to watch the danger zone. Note: we have a larger volume which is typical for breaking out of patterns. We want to see how price/volume reacts now at this point going forward.

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Bulls have to pick it up here to get anywhere

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281.38 is the Very Small TF I'm looking at to be supported or broken. If broken this brings us back into happy place territory. It is being supported currently. 281.69 is the Resistance Bulls are looking to smash. We do have a bear flag forming which usually are continuation patterns, in this case, continuation down from its recent spike up.

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Top of flag being tested, Watching for a spike in volume to create a topping signature.

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Top of resistance has been broken, technically this should be impulsive to the upside into the danger zone. Green Volume is steady

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We are approaching heavy resistance. Large timeframe resistance from the last 4 months. This is the whole reason I have been updating constantly .. To watch that area and its breakout.. If we do break up, and I am not posting it is because I am busy closing positions. But so far it looks like rejection.

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281.84 needs to be broken and held for the bulls

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1. We may get a blow-off top to the edge of the danger zone. Followed by a large volume spike for Topping volume.

2. Conversely, We may get continuation at that exact level and break this thing out to the upside taking us to new highs and really squeezing everyone a little bit more.

* LIke I had mentioned before If we get past the danger zone and sustain above it, showing large sustained buy volume (not spiky, but even and smooth) then derisking shorts and going short term long would be responsible trading.

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Price spiked up to top of the danger zone, then sold down... NOW its very imporant to see who takes control from here

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We got the Volume as predicted for topping signature. IF we get any lower from here,then it looks like a big old rejection

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Indeed! That was fast... Note that we are now below the red horizontal which was my average horizontal resistance for this region.

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Next support is 281.73.... Breaking that will continue the Bear case at this very important level/ day.

For the Bulls: You want to hold 281.73, consolidate high and tight, and form a pattern then break the highs with much more vigor than what just happened.

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Still Looking good for the bears..

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no signs of bottoming volume, though it is naturally resisting the trendline

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281.73 is still our support for the small Tf's. I have to leave, Be back in an hour. GL

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Ok Im back sorry for the delay.. .Looks like a 382 Retracement and declining volume, likley this pullback is turning over. Curious how far we move today to the downside. Next, week is being set up for downside action.

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Y'all remember how "h" patterns work right?

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Only 10 Minutes left. Get ready for the volatility .. Big up or down coming. We have formed a bullish pattern that could attempt to break up at the end of the day today. I wouldn't read too much into it if that does happen. If we break down look to find some support at the bottom of our new structure supportive trendline.

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BTW: vested interest to keep prices high over weekends for general sentiment control as people discuss markets over the weekend, thinking everything's fine with markets. Similar to last week's Friday being at the swing low point, for the whole weekend, keeping people fearful at Monday Open.. Looks like a lot of games in order to shake participants out and get that liquidity. But We will see how this develops Monday! .. have a wonderful weekend everyone.

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Today we broke up and out of the danger zone BIG resistance! Yet price didnt do it impulsively, this is a warning of a bull trap. Right now we are waiting to see of the danger zone gets hit, if so, then the big breakout will have been a failed breakout and a very strong trap. We are sitting at these levels now. Be patient ...

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Volume should be constant and increasing if this were a breakout. It has dwindled all day today. If it does break the recent small tfs high and volume really picks up in a steady (not Spiky) manner then it could be a real breakup. Watch for that.

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30 M Candle Just turned Red, and Looks like a Doji so far. Critical Time for the charts

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On a smaller tf. We have failed to make a higher high, and started a lower high, unable to get above the previous wick to continue the breakup. Volume diminishing, It is still anyone's game from here, depending on who shows up. But I am still siding with the bears, and that this is most likely a bull trap based on its lackluster conviction on this "breakout"

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We have broken structure, and further confirmed the likelihood that this was in fact, as titled in this post originally, A Bull Trap. Look for sustained sell volume as it breaks down from here... should be higher than most average volume today. I will be back in 1 hr for more updates.

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Bulls attempting to break out of this pattern. We have to watch this point very carefully. .. if we drop down below this white resistance line then it will be yet another rejection. I am surprised to see this thing consolidate high and tight still after 4 days now. So we must be careful as high and tight consolidations are bullish. Yet you know my bias.

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if 282.06 is lost on the Micro timescale then the selling will pick up. This is looking weak for the bulls.

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we are at 282.06 currently

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We broke the support (micro level)

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It should be evident that we have a ton of different confluences here at this level. Multiple trendlines intersecting.

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We have found our way back into the Structure and so we have had another small bull trap, on the failed breakout. This is such a significant level that many people are scared to get a bullish impulse that they have their stops set close and are getting constantly stop hunted, as institutions are looking for that prized liquidity. We could (COULD) Get a head and shoulders out of this throwover. Its measured move would bring us down to the structural support & horizontal confluence/gap area around 280.

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QQQ also below a significant confluence trendline resistance, With a micro timeframe ascending wedge

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And everytime I look at the Russell I get happy.

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This morning we Blew through the danger zone resistance and are clearly above the muli- resistance level.. What a cheap shot to do this in the overnight sessions. Pushing price above that level when everyone is asleep. .. Classy. This makes me doubt its price action a little more, and now you have the tough decision to make. Cut your losses at this level or ride it out. This all, of course, depends on your specific portfolio and your specific risk tolerances, etc etc. If you are in longer-term contracts price hasn't changed much for you and it is easy to cover positions here. I do want to note that Russell and Nasdaq haven't broken any specific structure at all like SPY has. In fact, SPY is seeming to be the outlier.

I would think that using this blue line and ascending channel would be important, and I am going to act like it didn't break any significant resistance. If IWM, DJI, MDY and QQQ all broke some significant structure/ major resistance then I would feel different ... i guess its official I must be a perma bear. ...

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Nasdaq
No clear structure break

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Dow Jones

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Mid Caps

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Russell 2000
Also, no clear structural breaks, and to me seems to be a SPY- Tradingview shake out : ) happy hunting

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Update=--- Back to SPY on the small TF's we have dropped back within the blue ascending channel. (ascending channels typically break down whereas descending channels typically break up)

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The most concerning factor of the "clear break of major resistance" is that there is 0 follow through at this point in time. So now we must see how we get supported as we fade the gap and if we go lower after fading then that would be very bad for bulls, because between now in then is their chance to show their strength.

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We are still consolidating right around this upper trendline in blue, on top of its ascending channel... Patiently waiting for a clear break of this consolidation at 283.78 resistance or 283.18 support

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By extending my blue line we see that we are below it as resistance after a recent test and possible rejection. We will likely see micro tf's support (283.18) broken soon, followed by a gap fill. If we break above resistance then do take caution as this market sure has the ability to continue up more from here for a time. If this is a bear market and this is the first rally up (dead cat) it could take a very long time to rollover.

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Currently, a pennant is forming, we will see if this morphs into a different pattern, which is the typical scenario. Use these trendlines in conjunction with the tops and bottoms of the consolidation.

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trying to break down

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Retest of pattern looking to be rejected

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We found ourselves back into the pennant formation. Watch for a break of highs and follow through. This formation could morph into a bull flag if it drops down to the dotted support, and finds buying from there, bull flags descending in nature and are continuation patterns to the upside if it breaks up and has follow through.

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We have a declining volume right now, which means indecision. As we attempt to break up out of resistance we want to look for a nice steady increase in volume. If we get a spike in volume without the steadiness then that would be topping. I will be using the Blue Resistance line as my next very important area to watch.

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We broke up on this.. We want to see a continuation and sustained green volume to confirm the break.

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Also, as a reminder... Keep your eye on the macro charts on DJI, QQQ, MDY and IWM. This will give you a better overall picture of the markets.

Ex: QQQ-Nasdaq

Ex: IWM- Russell 2000

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SPY did get a spike in volume. This could be a local top if this spike is not followed by sustained green steady volume. Otherwise, we just put in a local top.

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Russell 2k at resistance, on small Tf's.

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The same can be said for Nasdaq... at resistance on its patterns

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We are starting to see selling come into this breakout. I am paying very close attention to see if prices struggle to get any higher. It appears to be struggling a little at this point in time.

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another bull trap once again? poor traders with their stops

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Volume has diminished marking indecision... We will probably make our way back to the blue line, now support. We will see how we react to that.

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Once we get to the blue line once again.. we will be watching to see increasing green volume on the 3 minutes chart if volume is drying up and low then I think we will be breaking back down for the latter part of the day.

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Change in Behavior alert: Massive Red Volume here ... Typically denotes bottoming.. This has me scared and thinking of covering some positions. Or its the start of Increased massive selling as the catalyst. maybe the "big reveal" from the dark pool participants.

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QQQ- Since the Red Volume Spike of doom we have seen that prices have bounced back up to about a .50 retracement on decreasing volume. This could be the start of aggressive downside selling, possibly the catalyst I have been waiting for.. We will see but keep your eye open.

SPY- Similar situation. .50 retrace since the red volume spike and price drop. We are trying to ascertain if this was bottoming volume, or an institution aggressively selling into the overly aggressive bulls. Make no mistake a volume bar like this in the middle of a trading day does not go unnoticed by the professionals.

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volume has dried up on this retracement up trying to push for .618 retracement. With so little volume I don't expect this thing to see higher highs today

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The 4hr charts is printing a doji that keeps switching between green and red currently