Notes on SPY (weekly):
Positive:
The weekly posted the second green volume candle, and an inverted hammer, which at the near immediate bottom on 3/13 is not necessarily a reversal signal (most likely continuation upward). Last week tested the Gann confluence point at 390.38 and was rejected (bounced upwards). It never reached the projected point D on longer term Gartley ABCD (black). Shorter term Gartley ABCD (green) the target D is 402.86, another Gann line. This target is a .618 retracement from 1/30 high (Green point B) to 3/13 low (green point C) and should occur on Thursday 4/6/23, which is release date for April 1 Initial jobless claims.
Negative:
The weekly sits below the 52 week EMA, which serves as resistance. The twelve week RSI sits at 49.93, which could turn down off the critical 50 resistance point. Internals are also negative with NYSI McClellan summation index red and highs minus lows on NYSE and Nasdaq both in the red. Risk appetite is off, as Junk bonds to Treasuries is at an outlying low, although at an extreme which could signal potential reversal.
Conclusion:
Essentially we have had sideways action ranging from the weekly doji on 12/19/22 to present, a span of roughly 382 to 412, and pretty much in the red Ichimoku cloud, which continues to serve as resistance. However, we are well above the downward regression channel set from 1/2022 High to 10/2022 low, and in my opinion it would take a "swan" event to reclaim that trajectory.
I have a preliminary year end upside target of 412.67 for SPY, which would be 7.4% for the year off the 384.37 January 3 2023 open. The performance of the SPY for the month of January this year was +5.3 %, for a 1/31/23 close of 404.93. I anticipate another selloff in April or May, and then a doldrum summer followed by some upward thrust in the fall/winter. My year end target is a "best case" scenario -- it is possible we could have a "DOJI" Year or a "spinning candle", or a worse case negative year should the Swan flap its wings.
The last tight "spinning candle" years for SPY were:
2007, 142.25-146.21 (+2.8%),
2011, 126.71-125.5 (-.95%),
2015, 206.38-203.87 (-1.2%),
2018, 267.84-249.92 (-6.6%)
Should we replicate 2018, another period of FED tightening and subsequent easing, we could have a -6.6% fallback to 359. (357.25 is another Gann support line drawn from March 2020 low to January 2022 high).
So there's my range for 2023: -6.6% to +7.4% from the 1/3/2023 opening. Take the mid point of that range and you get 385.84 -- near the bottom of the red Ichimoku cloud -- +0.38% for a near perfect DOJI.
Swans invalidate this entire scenario.
Positive:
The weekly posted the second green volume candle, and an inverted hammer, which at the near immediate bottom on 3/13 is not necessarily a reversal signal (most likely continuation upward). Last week tested the Gann confluence point at 390.38 and was rejected (bounced upwards). It never reached the projected point D on longer term Gartley ABCD (black). Shorter term Gartley ABCD (green) the target D is 402.86, another Gann line. This target is a .618 retracement from 1/30 high (Green point B) to 3/13 low (green point C) and should occur on Thursday 4/6/23, which is release date for April 1 Initial jobless claims.
Negative:
The weekly sits below the 52 week EMA, which serves as resistance. The twelve week RSI sits at 49.93, which could turn down off the critical 50 resistance point. Internals are also negative with NYSI McClellan summation index red and highs minus lows on NYSE and Nasdaq both in the red. Risk appetite is off, as Junk bonds to Treasuries is at an outlying low, although at an extreme which could signal potential reversal.
Conclusion:
Essentially we have had sideways action ranging from the weekly doji on 12/19/22 to present, a span of roughly 382 to 412, and pretty much in the red Ichimoku cloud, which continues to serve as resistance. However, we are well above the downward regression channel set from 1/2022 High to 10/2022 low, and in my opinion it would take a "swan" event to reclaim that trajectory.
I have a preliminary year end upside target of 412.67 for SPY, which would be 7.4% for the year off the 384.37 January 3 2023 open. The performance of the SPY for the month of January this year was +5.3 %, for a 1/31/23 close of 404.93. I anticipate another selloff in April or May, and then a doldrum summer followed by some upward thrust in the fall/winter. My year end target is a "best case" scenario -- it is possible we could have a "DOJI" Year or a "spinning candle", or a worse case negative year should the Swan flap its wings.
The last tight "spinning candle" years for SPY were:
2007, 142.25-146.21 (+2.8%),
2011, 126.71-125.5 (-.95%),
2015, 206.38-203.87 (-1.2%),
2018, 267.84-249.92 (-6.6%)
Should we replicate 2018, another period of FED tightening and subsequent easing, we could have a -6.6% fallback to 359. (357.25 is another Gann support line drawn from March 2020 low to January 2022 high).
So there's my range for 2023: -6.6% to +7.4% from the 1/3/2023 opening. Take the mid point of that range and you get 385.84 -- near the bottom of the red Ichimoku cloud -- +0.38% for a near perfect DOJI.
Swans invalidate this entire scenario.