What a week we had Who would have thought that the week would finish with 4 out of 5 green candles (technically one day was -0.03% but it shows as a green candle so I don’t really count it are red). But SPY opened the week at 444.34, seeing an intraweek low of 440.68 and closed the week at 452.69 just $0.19 below its high of 452.98.
We will start at the weekly candle and work our way back.
note- the grey and pink channels are from the daily chart and do not exactly correlate over to the weekly chart very well so they are off a little but on the daily you will see their true placements.
On SPY weekly candle the week saw a mild 1.84% gain after the monsterous 5.82% gain last week. Spy now from last weeks low has gone from 415.79 as a low to a high of 452.98. That is a 2 week total gain of 8.9% total in two weeks. That is a ton of green movement. A few things to note on this chart going into next week to watch.
The candle did finish as a VERY strong and solid hanging man candle. The hanging man candle is the opposite of a hammer candle. The hanging man candle COULD assume a reversal of trend going into next week.
another thing to keep an eye on is the 20day EMA which lies now at 445.73. This is the first weekly candle closes ABOVE the 20 ema in 10 weeks. That is a very long time to be below the weekly 20 ema which generally trades as support not resistance. With this candle perched above the 20ema weekly we could see the potential for a bullish continuation. There is also a case to be made that SPY may attempt to test that 20 ema support intraweek before going any higher.
A keep resistance I will be watching (that I also expected to test today… and we may have tested had we not had the massive sell off with the VIX reaction to the Saudi attack) is 458. The level of 458 is currently set up as a double top and very well could play out as a triple top IF spy fails to break any daily candle above 458.
Volume wise this week closed out at 385million total volume which is the lowest volume week since the week of December 27th. The interesting thing about that is that is was the last bullish week before spy saw a massive sell off that we are currently recovering from.
Week candle wise:
Bears would want to see the 20 ema at 445.73 and then the weekly 8 ema at 441.97 test as support and see that support fail with an closure of the week back BELOW the weekly 20 ema at minimum but preferably below the weekly 8 ema.
Bulls would need to see a green week that tests 445.73 (weekly 20 ema) as support and confirms it before breaking cleanly through 458 with a weekly closure above 460 to prevent a double top from the week of January 18th which had a high of 460. Bulls also need to see a green continuation candle and avoid any sort of bearishly engulfing candle.
Now looking at the daily as I had mentioned this one you can clearly see the channels much better and the overall trend.
This week we technically had two red candles Wednesday which finished down 1.29% and then Monday which finished down 0.003% and as a doji. So technically we had three green days and two red days this week but as you can see on the chart due to Mondays price action it actually is represented as four green and one red.
Monday was the day the markets over-reacted mid-day to JPOW letting us know a 0.5bps rate hike as for sure going to happen, that they may do additional 0.5bps rate hikes and that they could do some outside of the meetings if needed. The odd thing about the way the market reacted was 1. Everything he said was already mentioned the previous week at FOMC and during his Wednesday testimony yet the markets rallied like crazy. He really did not say anything out of line or that I would call surprising. Yet the markets acted like it was the first time they heard JPOW be hawkish… it was odd. And 2. Despite the clear over reaction that sent SPY from its highs of 446 to 441 which is an impressive 1.1% drop intraday the markets still rallied from 441 to 444.39 to close the day at -0.03%.
The markets at this point truly do not seem to care about anything that is going on anymore. Much like today they very dramatically over-reacted to the Saudi oil field attack but still recovered and matched the intraday high before close after being down a pretty significant amount.
Wednesday was the only true red day this week managing a measily -1.29% close for the day. After 6 green candles myself and many though that could be the start of the dip but SPY had other places closing out another two green candles.
Daily wise I mentioned on Wednesday that a close below the 100 EMA was bearish but SPY managed to get back above the 100 ema to close two candles above the 100 EMA for the first time since January 14th.
Intraday volume has been extremely low with Monday being the highest volume at 107 million and the lowest on Thursday at 65 million. The weekly volume average this week was 77million per day compared to 111 million per day last week. That’s a 34million volume per day difference which is insane considering that’s half the volume we saw in one day on Thursday.
I am not really sure where the volume went someone said this week at one point that it was about 60-80% retail trading this week and 20-40% institutions trading. I have two theories. Either institutions are still sitting in cash fearing a recession and a true crash OR they are waiting until SPY hits just the right point and they are going to pull the rug one last time before we see a new high.
The lower volume is a concern not so much because once volume dramatically decreased we saw a dramatic bullrun but because what that increased volume can do to spy. This can either get very bloody or very green real fast if the volume returns to its normal.
SPY has found itself inside a nice little bullish channel here that it does not seem to want to fall out of. This channel gives spy an opportunity to see 460 as a high Monday or if it were to break through the critical 450 level it could test support down near 444.
If bulls want to see this see 460 and test the double top it needs a clear break through and holding of the 453 resistance line it traded under today intraday.
The true winner of this week was the VIX and Apple though.
If you look at apple it has also been on an impressive tear from a low on March 15th of 150.38 to a high today of 175.28 giving it a beyond wild nine green daily candles in a row. I am not positive but I am sure this is close to some sort of record. Apple has gone up a total of 16.5% in 9 trading days and is only 4.3% of its ATH of 182.94.
Why am I mentioning Apple in a SPY TA post? Well here is why. Apple currently makes up 6.94% of the total weight of Spy. The last time we saw our massive dip in January and had the crazy bullish recovery back then guess who also led the charge then? You guessed it Apple.
On January 24th SPY hit is low and reached its top on February 9th before retracing to its low on February 24th. Guess what days apple hit its low, high and low…. January 24th February 9th March 15th.
Until we see apple close a true red day and it loses its momentum to the upside SPY is not going to see any downside. Currently Apple daily MACD is still very bullish and its RSI is only at 64 which if you look back to its peak in December it will easily run >70. I watch apple intraday to guide where SPY is going. They don’t usually go far from eachother. I have even began picking up a few apple options here and there this week too depending on who is lagging.
Now the VIX saw an absolutely impressive week opening at 25.14, with a intra week high of 25.14, a low of 20.8 today where it also closed. The Vix over the last 3 week has gone from a high of 37.52 all the way down to todays close at 20.8. That’s a 45% decrease in 3 weeks. So what does that mean? That means over the last three weeks we have seen a peak in fear in the markets which obviously coincides with the low in the market. Looking back to this last year VIX has run from an average of about 15 to 20 depending on the time frame. That means we are near the mean reversion of the VIX.
To me this means that SPY will not be pulled along the way it has been the last week. The VIX intraday for this entire week has been the one in charge. Just like today we saw the massive VIX spike intraday but as soon as the VIX settled and started to trend back down Spy settled and started to trend back up and that’s when I knew I could capitalize on some calls.
The VIX (fear) seems pretty low and numb at this point and I really do not see anything that is going to re-spook it the way it was in January and February. With the wildcards of inflation, fed movements, war, oil, etc. all priced in at this point we really cant expect anything to disrupt the VIX. Both “fear” reactions this week (jpow Monday and then Saudi oil field attack today) were handled intraday and the fear disappeared very quickly.
Weekly profit goal= $2500
actual profit goal= $1025
(I took a big loss Monday on some perfectly badly timed calls as JPOW tanked the market and had to grind my way back to green).
I made 25 trades this week total (23 spy, 2 apple)
Apple- 2 for 2. Average%= 16%
Spy- 17 for 25, Average%= 3%
total average% per trade= 5% this week
Big loss%= 70% on a 0dte call that went against me
Biggest win%= 50% on some 0dte calls bought near the bottom today.
Overall- it was a very good week for me. I did not make my profit goal but If I erased the one call I had went very heavy on Monday I would have beat my weekly profit goal. This week I continued to perfect my strategy and continued to test not only my patience but my trust in my indicators and strategy. Early in the week due to the JPOW dump I did get slightly discouraged but no one could have predicted that (though its also a risk to trade when a speaker is going to take like JPOW or Biden) and I should have had a proper stop loss on. This was a good week for me and today I finished on a very strong note. I had 2 days this week where I had no red trades all day also which is always great.
I hope everyone has a great weekend and look forward to seeing you Monday!
Remember- Next Friday April 1st I will no longer be posting daily TA and pre market TA to reddit. I will only be posting this weekly update on Fridays. If youd like to stay apart of those send me a DM.
Submitted March 26, 2022 at 01:35AM by DaddyDersch
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