S&P
Last week we saw again the S&P500 (SPY) closed the week but also the month and quarter at an all time high. But if we take a look this isn’t how tops are made and a close at the high creates a ‘weak’ high. So in other words there is no sign of buyers rejecting prices.
Let’s look at last week’s SPY chart, which shows the rally was in
line and it is moving in the same way as it did in March to July
trading.
This would suggest that they may rally higher early this week, but it could fail and roll over near the middle to end of the week. If it were to do this we would have what we would consider a valid reversal pattern coming up. Most importantly, it will have the appropriate structure, and come in the right place.
So this means that our charts are showing some reverse engineering that will identify a top forming and from there we will get an indication on where the market should go if and when it turns.
So if we look at the bigger picture we start to line up very well. If you were to ask us which areas are important retrace levels, we could answer with pretty good accuracy. the pre -election low, the 2015/2016 low, and the 2000-2007 highs. It is very interesting to see how they line up with the when we look at the Fibonacci retracement levels.
So what can we conclude from all of this; the longer-term outlook we see the S&P is ready for a large drop, and the shorter term could roll over by the end of the week.
We are seeing that equities could be nearing the end of their rally. I we step bag to look at the bigger picture then we see that a major top is approaching, but in the short term prices are likely to head above last week’s high. Any retrenchment later this week to below 2520 could well signal the top is in now.
Last week we saw again the S&P500 (SPY) closed the week but also the month and quarter at an all time high. But if we take a look this isn’t how tops are made and a close at the high creates a ‘weak’ high. So in other words there is no sign of buyers rejecting prices.
This would suggest that they may rally higher early this week, but it could fail and roll over near the middle to end of the week. If it were to do this we would have what we would consider a valid reversal pattern coming up. Most importantly, it will have the appropriate structure, and come in the right place.
So this means that our charts are showing some reverse engineering that will identify a top forming and from there we will get an indication on where the market should go if and when it turns.
So if we look at the bigger picture we start to line up very well. If you were to ask us which areas are important retrace levels, we could answer with pretty good accuracy. the pre -election low, the 2015/2016 low, and the 2000-2007 highs. It is very interesting to see how they line up with the when we look at the Fibonacci retracement levels.
So what can we conclude from all of this; the longer-term outlook we see the S&P is ready for a large drop, and the shorter term could roll over by the end of the week.
We are seeing that equities could be nearing the end of their rally. I we step bag to look at the bigger picture then we see that a major top is approaching, but in the short term prices are likely to head above last week’s high. Any retrenchment later this week to below 2520 could well signal the top is in now.
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