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SPY Rally:  A Junk Technical Rebound ?
 October 12  ​( From Stockcharts, TradingView,  )
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The Situation

We just start to realize how deep and violent the correction was on the ​​​US ​
​equity ​market lately. From the peak price on SPY ETF reached on May 20 2015
​at 213.78 ​to ​the low made on August 24 at 182.40, for a ​move of 14.68%...

That was the first serious real correction since October 2014...​

​​In fact, when we broke a Rising Wedge Pattern on August 20 2015 at 205.94​, ​
​game was over on SPY on a short term basis and then ​reached then the panic
​selling level on August 24 at 182.40. ​( See Chart Below - Blue Trendlines )

​​Rebounding from those abyssmal technical levels was quite a statement from
​Mr Market.
We did on September 29 a technical test of the Daily Low of
​A​ugust 25 (186.93) and rebouded violently. It was a double bottom​ and the ​market
​rallied and for the first time since August 24, and it did with stronger volume.

But in reality, it was a pure Technical Dead Cat Bounce coming from only
​3 SP500 sectors since September 30 as shown by the second chart below:
​1) Energy Sector up +7.7%
2) ​Materials Secvtor up +5.6%
3) ​Industrials Sector up +2.0%

​​ETF s volume account now for more than 15% of total volume on ​the stock
​​exchanges. It now influence tremendously the market ​ ​making​ new highs or ​new lows.... We must follow now the ratio of ​the ​ETFs Advance​ Volume compare to the ETF s Declining Volume to the US Stock Market. In fact, the last time we had the 7 DMA of that ratio at that
Overbought level was back on February 13 2014.

​Another way to look at it is the Swenlin Trading Oscillator Volume Index from the above mentioned sectors and SPY; ( see third chart below). It shows an Overbought situation not seen since December 2013!

Is this only a dead cat bounce from those 3 sectors or a more sustained rally?  We still don t know but what I know is that short term indicators are into the overbought territory and what is leading the charge til now paints a less rosy picture than the Mighty SP500 Index is showing...



SPY Rally: A Junk Technical Rebound ?  $SPY    #Trading #Emini #investing  #SP500
SPY ETF ( Daily Candles )
Volume ( Bottom Panel  - Blue Area )​​

​SPY ETF Sectors Performance
​since September 30 til October 9 2015 ( Bar Chart )
Swenlin Trading Volume Oscillator - Daily
XLE - Energy Sector
XLB - Materials Sector
XLI - Industrial Sector
SPX- SP00 Index​​​​