As of now, we still have sharp divergences in place on the 60 minute thru daily SPY charts. Although these divergences could be burned through if prices continue to move higher, they are a red flag that indicate waning momentum as the SPY makes a new high. On the daily chart, we did get the confirmation of a bearish crossover on the MACD at the close yesterday and although that signal will likely be reversed on a green close today, the potential divergence on that time frame will still remain solidly intact for now. Only a continued & substantial move higher from current levels will negated those divergences that have been building on the 60 minute + charts.
Although I wouldn’t suggest shorting this early morning pop, I would definitely not be chasing it by entering new long or even covering any short positions (other than those that have clearly exceeded your individual stop parameters). Personally, I’m going to wait until at least Monday to see how the market follows through (or not) to these new intraday highs before adding or closing any positions. For anyone interest in an update on any of the active trades, feel free to contact me & I’ll do my best to share my thoughts via email or a new post.