2/23/22 SPY Pre-market Analysis
Over night we saw quite a gap up of the futures leaving a small gap that was already filled this morning and now futures continue to head green. A couple things i will be watching for today. On the 15 minute chart we can tell we are in a very clear rising wedge pattern. This pattern usually does indicate a pending dip so we need to keep an eye on that to see if we reach a max resistance and start a sell off at some point after market open.
Today is one of the greenest and stablest pre-markets i have seen in a while… my only confusion lies in why. Why are we bullish? What has changed from yesterday to tonight? The answer… absolutely nothing and that should worry anyone who is thinking we are going to be overly bullish today. Granted we are absolutely due for a green day or at least a relief bounce much like we are seeing right now… It does not mean we are going to see some wildly green 2.5% green day… nor does it mean anything has changed with the economy and inflation and the already correction we have been in since January 3rd. IF you chose to play this green today I do not think now is the time to go long on calls. If anything today could be a good positioning for long puts… But nonetheless we have to see how today shapes up. With a relatively uneventful day when it comes to news or data it is actually going to be interesting to see what the market does. My gut still tells me this is a bull trap….
Here are some important levels to watch-
Intraday support- 432.2 –> 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- 433.2 (current resistance) –> 433.7 (this is the upper limit of the downward channel) 434.2 –> 434.6 –> 435.5 (yesterdays double top… also the top of the rising wedge).
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- 433.7 –> 439.2 —> 450.3
A couple scenarios i will be watching for today to play out and what they could mean-
- We break out this morning and break the rising wedge and resistance at 433.7 and continue a bullish day up near the next resistance of 439.2 (about a 2.1% day). If we did this and saw a rejection around the 439.2 region especially some sort of hanging man candle on the daily that could be another very bearish sign that we are going to trend much lower and very soon.
- we reject at 433.7 and “fall” out of the rising wedge. If we were to fall out of the wedge i would look for the major support test of 430.7. If we break this level i would full expect a retest of the low of the day yesterday of 425.8 (-1%). If that low breaks i then expect a test of the january low of 420.76 (-2%).
- In this scenario if we were to break 420.75 i suspect that to signal a much bigger sell off ahead for the week down to around 400.
- If we bounce and hold right at 420.76 we may actually form a reversal hammer candle on the daily. This would signal a V shaped bottom bounce and could signal there will be some more upside in the range of 448-450.
These are the 2 scenarios i envision to happen today.
I wouldnt be surprised to see volatility back today like we saw yesterday. Remember to secure profits, dont get greedy and all you need is one small consistent 10% gain and you are golden. We dont need to get rich over night. Wait for the right setup and the right momentum. No guess and dont FOMO.
I am headed to sleep i will see you guys during power hour!
Submitted February 23, 2022 at 02:28PM by DaddyDersch
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