The SPY hit my downside target originally posted here just over 3 weeks ago within pennies before reversing. I’ve included that original chart from July 17th in which I stated “T2 is my preferred target, which is the bottom of the 5/27 gap as well as the 50% Fib retracement level.” The bottom of the 5/27 (Tuesday) gap was the 5/23 (Friday) high of 190.48 , following a 3-day holiday weekend. The SPY kissed a low of 190.55 just before the close yesterday while putting a divergent (bullish) low on the intraday time frames (15-120 minute charts)… a mere 7 cents above the bottom of the gap and a good example of how stocks, sectors & indices often reverse just above or below the actually support level (hence the reasoning for placing my buy-to-cover orders on short trades slightly above the actual support level, although I wasn’t trading the SPY in this case).
That brings me to a point that I have discussed here before which is what I consider to be a major shortcoming of the stockcharts.com charting platform: The inability to display the correct (true) price history of any dividend paying security on an intraday time frame. When viewing daily or weekly time frames, Stockcharts.com does allow for the viewing of the price history stocks and ETFs “unadjusted” for dividend payments (which I feel is a very important feature when using past price history to help determine future price direction… i.e.- technical analysis). However, the ability to view actual, i.e.- unadjusted, stock price history on intraday charts is not an option with Stockcharts.com. I have address this issue with them in the past, to no avail, and the main reason that I continue to use Stockcharts.com is the ability to provide RSOTC followers the ability to view the live charts via hyperlinks (a feature not available in the overall superior TC2000/freestockcharts.com charting platform).
As mentioned above, in this July 17th post, along with a static & live link to my 60 minute SPY chart from stockcharts.com, I had stated the target which has now been hit on the SPY. Below is the previous 60 minute chart from July 17th followed by a screenshot of today’s 60 minute chart from Stockcharts.com, in which it appears prices fell well short of the bottom of that 5/23-5/27 gap. However, in viewing today’s 60 minute chart from TC2000, one can easily see the almost perfect kiss of the bottom of that gap before prices reversed. Again, I have discussed this shortcoming of stockcharts.com in the past & don’t want to beat a dead horse but I feel that this is an important issue for those who trade using sc.com to be aware of, especially as sc.com is one of the more popular charting platforms in use today.
- SPY 60 minute July 17th
- SPY 60 min Aug 8th-sc.com
- SPY 60 minute Aug 8th-TC2000
- SPY 120 minute Aug 8th
On the TC2000 60 minute chart above, I’ve also listed what I believe to be the two most likely scenarios for the SPY: Prices reversing at the former T1 level (now labeled R1 for 1st resistance level) OR prices continuing up to the R2 level (194.30ish) before reversing and kicking off the next major wave of selling. I’d have to give equal odds to either scenario at this time while a move above the 194.50 area would have near-term & possibly intermediate-term bullish implications.
Moving on to the bigger picture, earlier this week, the $SPX (S&P 500 Index) made a fairly solid intraweek breakdown below the uptrend line & is currently backtesting it from below. A solid close & follow-up move back inside the wedge next week would dampen the bearish scenario while a rejection off the trendline (on Monday) would likely trigger the next wave of selling & a move towards the 1750 area in the coming weeks. Should the $SPX fail to regain this key uptrend or even regain it into next week only to once again break below soon afterwards (a likely possibility), that would most likely lead to a breakdown of the $OEX (S&P 100 Index) below this critical bull market uptrend line generated off of the 2009 lows. As always, when trading off of the weekly time frames, it is the weekly close (end of Friday) that matters as intraweek dips below support are a fairly common occurrence and often prove to be whipsaw signals.
- $SPX daily Aug 8th
- $OEX weekly Aug 8th