SPY crash incoming
What’s up WSB.
So, the SPY has been irrational and no one truly knows what direction it’s going to take except for maybe Nancy Pelosi. I present to you my very amateur technical analysis. Am I wrong? Probably. Are you reading this anyway? Yes.
Now, some of you are gonna call me crazy. And you’re probably right! Why do I think it’s going to crash? Stay tuned and I’ll tell you why.
My thesis here is based on the price action the last few days. The last time the price dipped below the 260 day moving average on the daily chart was during the crash of 2020 in March. You may be asking yourself “But Harryp0thead, why the 260 Day MA?”. The answer to that is simple. There are 260 Business days in a year, therefore, it is the yearly moving average.
Back to my thesis. My first chart shows the daily chart action. I traced over the 5 day MA of the 2020 crash and placed it over the current price action. Fits like a glove. Also shown are the 260 and 26 day moving averages. My second chart shows the 30 minute price action. Once again, the indicators fit like a glove. The March crash was bailed out by the fed printing money and we may finally be seeing the crash as it was meant to be.
If you look closely and we are to believe that the chart can/will behave the same way, we will be trading sideways to the end of January. Is it possible that we dip or rise before that? Of course it is! I believe this sideways trading is a bull trap before the market de-leverages and corrects from the fed going brrrrr for far too long.
Therefore, I am of the belief that the price movement is going to depend on what the fed does in the coming days/weeks. Does the fed decide to continue printing money? SPY goes brrrrrrrrr. Does the fed decide to taper off and raise interest rates? Spy goes 🌈🐻.
How far down will the SPY go if it crashes? Like I said, no one knows except for maybe Nancy Pelosi.
SPY Goes 🌈🐻 if the fed raises interest rates and turns the printer off.
THIS IS NOT FINANCIAL ADVICE
Submitted January 26, 2022 at 06:06AM by harryp0thead
via reddit https://ift.tt/3g07O2m