SPY - momentum NO, consolidation MAYBE, volatile YES
Another exciting week on the SPY!
These type of weeks, is where and how people get burnt, especially IF they are not trading on lower time frames. The range of the higher time frames are in excess of 2.5% per day, and 3 out of 5 days in the week had such volatility in different directions! By the way, these volatility periods tend to happen when the VIX is above 30, with large moves in either direction on a daily basis.
The weekly chart shows an overall picture where the down draft continues as previous week's candlestick pointed out to the downside. The week was not all down, and although it closed down, there was a good range for the week's candle... just over 6% from the week low. The weekly technical indicators are still showing bearishness, but do note that the TD Sequential is in the last candle of the Setup, which is pretty much perfected. So over the next 2-4 weeks, we can expect more downside towards the previously mentioned target of 325-335, and volatility to add intraweek range. The last week's candle is not giving much commitment to momentum, but maybe to possible consolidation, and definitely suggests volatility with wide ranges.
The daily SPY chart appears to be more interesting at this point, with the development of the volatility obvious. The week started out with a gap down, Gap and Run, type of pattern. Especially after an intraday failed attempt to close the gap (observed by the upper tail), there was more downside to be expected. The SPY continued down further, and into a mid-week stall. But on Thursday, an interesting technical event took place... where it started with a large gap down and it was decisively closed with the early upside with a 5.5% range difference. This actually formed a very huge Bullish Engulfing, which candlesticks practitioners would declare bullishness, and a next day follow through would confirm. However, what started out looking like a confirmation on Friday with a gap up, closed and it that was it. It was made worse when Friday closed down (357.63) just above the previous candle body halfway mark (357.59). So strictly speaking, this is not a Dark Cloud Cover candlestick pattern, but is is close enough by 0.04 points.
The way I see it is that the very bullish engulfing failed a follow through, and the supposedly Dark Cloud Cover also failed to totally qualify by 0.04... I would take it as an overall bearish outlook for the next week, with the caution of a possible bounce and definitely expecting long candles or candle wicks (tails).
Also noted that the SPY closed below the June previous low, for the second time.
Daily MACD is indicating a mild bullish uptick, but all else still drifting down...
Overall bearish, with possible technical bounce mid-week (Wed-Thurs).
These type of weeks, is where and how people get burnt, especially IF they are not trading on lower time frames. The range of the higher time frames are in excess of 2.5% per day, and 3 out of 5 days in the week had such volatility in different directions! By the way, these volatility periods tend to happen when the VIX is above 30, with large moves in either direction on a daily basis.
The weekly chart shows an overall picture where the down draft continues as previous week's candlestick pointed out to the downside. The week was not all down, and although it closed down, there was a good range for the week's candle... just over 6% from the week low. The weekly technical indicators are still showing bearishness, but do note that the TD Sequential is in the last candle of the Setup, which is pretty much perfected. So over the next 2-4 weeks, we can expect more downside towards the previously mentioned target of 325-335, and volatility to add intraweek range. The last week's candle is not giving much commitment to momentum, but maybe to possible consolidation, and definitely suggests volatility with wide ranges.
The daily SPY chart appears to be more interesting at this point, with the development of the volatility obvious. The week started out with a gap down, Gap and Run, type of pattern. Especially after an intraday failed attempt to close the gap (observed by the upper tail), there was more downside to be expected. The SPY continued down further, and into a mid-week stall. But on Thursday, an interesting technical event took place... where it started with a large gap down and it was decisively closed with the early upside with a 5.5% range difference. This actually formed a very huge Bullish Engulfing, which candlesticks practitioners would declare bullishness, and a next day follow through would confirm. However, what started out looking like a confirmation on Friday with a gap up, closed and it that was it. It was made worse when Friday closed down (357.63) just above the previous candle body halfway mark (357.59). So strictly speaking, this is not a Dark Cloud Cover candlestick pattern, but is is close enough by 0.04 points.
The way I see it is that the very bullish engulfing failed a follow through, and the supposedly Dark Cloud Cover also failed to totally qualify by 0.04... I would take it as an overall bearish outlook for the next week, with the caution of a possible bounce and definitely expecting long candles or candle wicks (tails).
Also noted that the SPY closed below the June previous low, for the second time.
Daily MACD is indicating a mild bullish uptick, but all else still drifting down...
Overall bearish, with possible technical bounce mid-week (Wed-Thurs).
