With the stock futures pinned to the 5% lock-limit up level SPY all morning in the pre-market session, I wanted to wait to see how the market would trade once the limit was released at the 9:30 am opening bell. SPY checked at the downtrend line immediately following the opening gap up today with a solid break & 30-minute close above the trendline still likely to spark another rally up to at least T1. As I like to say, resistance is resistance until & unless taken out & as of now, that downtrend remains resistance. Therefore, the next objective long entry on SPY would come on either a solid break above the trendline or a pullback to the 228 support level with the same potential price targets as last week. Of course, one could also make a case for an objective short entry here at trendline resistance with a stop somewhat above. 30-minute chart below.
SPY 30m March 24th
QQQ has gapped above its comparable downtrend line to just above the 179.13 support/resistance level offering an objective long entry *IF* SPY breaks out above its trendline or on a pullback to backtest the trendline from above.
QQQ 30m March 24th
Should we get a convincing breakout above the downtrend line on SPY, I think the financial sector appears poised to outperform both QQQ & SPY. XLF (financial sector ETF) could spark a short-covering rally on a break above this 30-minute bullish falling wedge pattern with any & possibly all of these marked resistance levels as potential targets but as with SPY, resistance is resistance until & unless taken out.
XLF 30m March 24th