SPY has popped out of the rising wedge to the downside - however volume is on the low end.
Watching for the following scenarios:
1. A breakdown towards the 50SMA at 442.15. In this situation SPY likely following similar sequences as
TSLA
,
MSFT
,
AAPL
and others who did not find support at the 50SMA and continued lower until the 8ema crossed under the 50SMA signaling the turn in momentum to the downside. If this happens on SPY, then we are likely headed lower towards 424-430. There is an extreme amount of SEP and OCT put flow for very far otm strikes from 380P to 428P. Everyone I think is expecting a gap fill at 443 and bounce however if we fill it now, unlikely to be a bounce.
2. Scenario 2 is a reclaim of the 451.76 level by the bulls, which would be a re-entry into the rising wedge and which will then again target the upper portion of the wedge between 460-464 where then it will stage the real fall into 400.
Either way there is a clear short setup here, however 1 scenario involves a breakdown of the wedge now (similar to AAPL, MSFT, TSLA wedges that are 1 week ahead of SPY), and scenario 2 involves a higher high before that rising wedge breakdown.
Watching for the following scenarios:
1. A breakdown towards the 50SMA at 442.15. In this situation SPY likely following similar sequences as
TSLA
,
MSFT
,
AAPL
and others who did not find support at the 50SMA and continued lower until the 8ema crossed under the 50SMA signaling the turn in momentum to the downside. If this happens on SPY, then we are likely headed lower towards 424-430. There is an extreme amount of SEP and OCT put flow for very far otm strikes from 380P to 428P. Everyone I think is expecting a gap fill at 443 and bounce however if we fill it now, unlikely to be a bounce. 2. Scenario 2 is a reclaim of the 451.76 level by the bulls, which would be a re-entry into the rising wedge and which will then again target the upper portion of the wedge between 460-464 where then it will stage the real fall into 400.
Either way there is a clear short setup here, however 1 scenario involves a breakdown of the wedge now (similar to AAPL, MSFT, TSLA wedges that are 1 week ahead of SPY), and scenario 2 involves a higher high before that rising wedge breakdown.
Trade closed: target reached:
430 target met on SPY
can see lower into 427 before dead cat bounce
can see lower into 427 before dead cat bounce