2/22/22 SPY Analysis and recap
After the long three day weekend watching the futures go anywhere from up 1.5% to down almost 2% we finally got to see what the real market sentiment was. Overall We saw the classic red day start. We had a morning pump to test resistance at 435.5 and it formed a double top. From there once it got under the 8 ema it pretty much never saw green again… until ole Biden had his speech around 2pm. (i did not watch the speech myself but from what i heard nothing new was really said) but of course markets pumped from the intraday low of 425.8 to 423.7 until we formed a double top. Power hour showed a nice sell off for us which in my opinion continues to show the overall market sentiment.
Watching the candles live on the pump you could tell it was fighting every step of the way to keep going higher (after the initial big green candle). Reminded me of the FOMC meeting last week (granted that was a much larger and more extreme pump) the buying pressure just continued to fail more and more. Looking at the chart though besides the last 15 minute candle I did note that the 3 green candles we had after the speech were amongst the biggest for the day. I wonder if this was algos at work personally. In the end algos did their thing and burnt the put holders only to drop it later on again.
In this market we need to lock profits quickly and early. We also need to mitigate losses too. We can not let these positions run red and wait and see. It is also wise to close positions before any big speechs too. I did not know Biden was speaking today to give the heads up pre market and found out as i was waking up and getting into a position (unfortunately).
A follower (why i love having a community like this) just posted an interesting fact that this is the lowest CLOSE of a daily candle since October 12th. Checking the chart it appears to be October 4th actually (per trading view as October 12th closed- 435.18, Oct 6- 434.9, Oct 5- 433.1, Oct 4-428.64). Like i said we are making lower lows. ,
From the high of 480 we are currently down 10.5%… I do believe we have another 5-15% to go still. Looking for somewhere around 360 to 408 depending on how inflation is truly handled and the market reacts.
Premarket saw a pretty nice 0.4% pump just now but i dont really put much into that honestly. Sentiment for me and overall is still bearish until proven otherwise. I dont forsee bullish sentiment until war stuff is settled AND until march when we finally get a rate hike and feds deal with inflation.
Intraday support- 430.7 –> 429.3 –> 428.3 –> 426.8 –> 425.8 –> 424.7 (there are about 4-5 support lines that all cross right on top of eachother here) –> 423.3 –> 420.8 (low from januarys dip)
-1%=425.27 (just below todays intraday low)
-2%= 420.97 (essentially the low of januarys dip)
-2.25%= 418.8 (i mention this support later on when i speak about the daily channels)
Intraday resistance- 432.2 –> 432.7 –> 434.7 –> 435.5
Overall my thoughts and anticipation is that we will continue our bear trend and end the day red again and finally test the low of 420. We very well could see a double bottom here. A double bottom here would be a SHORT TERM bullish trend that i would play accordingly. A hard bounce and especially a hammer candle finish near 420 tomorrow would signal a SHORT TERM reversal and potential run to the 440-450s before we correct further.
I also see a potential tomorrow where we could see a pump up near 435.5 as it would form an upside down triangle along with a daily/ 15 minute chart 2 day double top which could confirm further downside. It is a classic SPY pattern we see intraday alot… doesnt usually happen over two days but it is possible and i will be watching for that.
I want to introduce you guys to a new daily chart i am working on with some channels i am watching for potential MAJOR supports and resistances to watch for milestones.
Now i know this is hard to look at and decipher what i am seeing exactly so let me explain briefly so when i reference it in the future you understand. I used the trading view colored channel feature to draw potential parrallel channels (spy loves channels) to see if we can find some longer dated and more important daily supports and resistances as i find that to be helpful. on this chart i will delete channels as we break them with the ultimate goal of finding the channel we are actually going to trade within so we can have a better sense of directions for bottom, middles and tops.
Current major supports on the DAILY- 424.5 (got real close to that today at 425.8) –> 419 –> 400
Current major resistance on the DAILY- 448 (right now we have trended down so low that most major resistance all coincide near 448).
DAILY ema update- the daily 200 ema remains at 439.8. We have just saw the 8 ema cross below this point. The 20 ema crossed below the 150 ema and is quickly approaching the 200 ema. Currenty 20 ema sits at 44.75. The 50 and 100 ema are also sitting right on top of eachother near 451 with the anticipation being that tomorrow it will officially cross below. All of these are bearish signs especially how downward they are indicating. I dont forsee a major recovery until the 8 ema and 20 ema recover upward but currently they are point pretty straight down. The 20 ema crossing below the 200 ema will be an even more bearish sign and indication.
10% challenge today-
I bought a 2/23 428P when i woke up near 2pm ( not knowing biden was speaking) looking for a small bounce near 425 but of course it bounced hard and burnt me like crazy. I was responding to reddit/ discord and by time i checked back it was down -40%. Was not a great start to the week.
I then bought a 2/23 431P near the double top of 432.7 and was able to close that for a 50% gain.
I held a 3/4 433P over night that was up 50% when i woke up and regrettably didnt sell (but i again didnt know about biden and thought it was going to keep going down per the trend i was seeing) ended up closing it towards end of day for 20% gain. I also seeing this overall trend decided i wanted to close this and open a slightly longer dated put too.
Overall p/l for the day was $1800 which is about 18% for the 10k 10% challenge. Got lucky that we had the end of the day reversal.
I am currently holding a 3/11 429P and a 3/25 429P.
Planning to hold these till we test the 420 bottom and i can see what that looks like. If we test it tomorrow and end up bouncing i will close end of day. If we break 420-76 i will continue to hold them.
Market wise until we see a breakout green day or we test 420 i feel okay holding a SMALL position of 14-30 DTE puts. I will adjust these daily as i see fit. I also will look for take profit near 50%. But again the big support i am watching to determine what i do is at 420.76.
Submitted February 22, 2022 at 10:39PM by DaddyDersch
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