![]() ![]() Bullish traders may want to exercise patience until a sign of a reversal to the upside is printed, such as a bullish doji or hammer candlestick.The most recent lower high was formed on Thursday and Friday at $419 and the most recent confirmed lower low was printed at the $411.39 mark on Wednesday. Thursday’s high-of-day combined with Friday’s steep decline has confirmed the SPY is now trading in a downtrend.The second most likely scenario to lower prices on Monday is that the SPY forms an inside bar, which will lean bearish because the ETF was trading lower before forming the pattern. Eventually, a bounce to the upside is likely to come because when a stock or ETF moves in one direction too quickly, sideways consolidation is likely to take place.The candlestick indicates lower prices, and possibly even a gap down, could be the case for Monday. The SPY Chart: The sharp 2.5% plunge on Friday caused the SPY to print a bearish engulfing candlestick on the daily chart. Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial. 13 when CPI data for the month of August is released at 8:30 a.m., one week before the Fed meets to make its decision on the next rate hike. The market may need some time to digest Powell’s speech and is likely to trade in a choppy manner over the next days and weeks. Speaking about the back-to-back 0.75% increases, which the Fed raised rates by in June and July, Powell said, “another unusually large increase could be appropriate at our next meeting.”Ī small glimmer of hope was offered when Powell said, “at some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases.” The comment left no certainty as to when the easing of rate hikes may come.
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