Always consider hidden risks
SPY Technicals:  Pennant Resistance Retested ?
 September 22  ​( 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. But in reality, it started a Technical Continuation Pattern called a Pennant and then a Break Out on September 16.
( See Chart Below - Grey Trendlines )​

​​But as the Break Out happened on September 16, we were also expecting that the Volume normally expands at the start of the breakout especially the the Small Speculators have the Longest Position ever on the
​E-Mini SP500 Futures with 426.1k contracts. It did not; that was the first shot across the Bow. ​
​( See Second Chart Below - Bottom Blue Area Line )​  
SPY ETF PVT: Break Out without Strenght ?

​​​​​​But the most interesting technical factor to me is that on September 17 we had a Shooting Star Pattern on SPY ETF that may bring a Major Reversal in Trend. Having a Daily close today below the old Pennant Break Out Trendline will confirm in fact that it was a False Break Out on SPY.​
( See Second Chart Below - Top Ellipse )​

In fact, we did have on September 18 the first test of the Trendline from that Broken​​ Pennant ( now Resistance Trendline ) as it was stated in my article: DJ Transports Technicals - Rejection ?

But the most interesting technical factors is that we tested back on September 21 that Resistance Trendline from that Broken​​ Pennant in the expected Dead Cat Bounce move and was rejected. That Dead Cat Bounce move and retest of the Trendline was done in a lower volume environment, typical of Bulls losing control to
​the Bears.
( See Second Chart Below - Bottom Ellipse )​



SPY Technicals: Pennant Resistance Retested ?   $SPY    #Trading #Emini #investing  #SP500
SPY ETF ( Daily Candles )
Volume ( Bottom Panel  - Blue Area )​​
SPY ETF ( Daily Candles )
Volume ( Bottom Panel - Blue Area )​​