The SPY (S&P 500 tracking ETF) is now within 1% of the maximum bounce target that I laid out shortly after the markets bottomed in the 2018 Year-End Stock Market Analysis video (clicking this link will start the video at that point). While this rally has almost carried to the upper end of my expectations, nothing material has changed in the longer-term technical outlook that would cause me to revise that max. bounce target at this time.
SPY 60 video screenshot from 12-31-18
That max. bounce target comes in around 281 on SPY & 2815 on $SPX. Those levels contained the three major reaction highs during the large consolidation period from early October to early December that formed after the initial thrust down off the all-time highs in the major US stock indexes.
As that is a very significant, well-watched level, my expectation is that the SPX will either reverse just shy of it (as in very soon) or make a brief run above it to clear out short interest (ie.- a stop-raid) and such in some more longs before reversing. Regardless of whether on not either of those two similar scenarios proves to play out, the risk/reward to establishing new long positions with a high correlation to the broad markets remains unfavorable at this time IMO, despite the resiliency of the trend.
I just published a second video covering just a general overview of the US equity markets via SPY, QQQ, /ES & /NQ for the public followers of Right Side Of The Chart as well as our YouTube channel. For the most part, it was just a summary of what I’ve covered in the recent member-only videos but for those interested, it can be viewed below.
playback speed can be increased in the settings to reduce video duration