SPY turned... hard down!What an eventful week! Well, at least a very eventful Friday!
By now, most of us would have read about Fed Chair Powell's comments at the Jackson Hole Symposium. The markets did not take lightly to the stated prudence.
Technically, we can see from last couple of week's analysis that the bull rally with old in the teeth, and that last week's SPY chart was a potential reversal, with a likely breakdown, and earlier breakout failure. The dramatic way it occurred tells much of the underlying sentiment. The weekly SPY chart clearly started the week badly with a gap down, following a bearish candlestick pattern last week. Then this bad start to the week worsened a lot more on Friday, with a massive downdraft that had the week clock a bearish marubozu styled candlestick.
Bearish with some momentum.
The SPY Daily chart made the bearish stance a lot clearer with the massive bearish marubozu on Friday that basically failed support and critically the 55EMA. Technical indicators all crossed under the zero line, supporting the bearish alignment.
The breaking of both weekly and daily 55EMA on the same day, with a similar bearish marubozu candlestick is a very clear bearish indicator with momentum that calls for more downside. It is expected that there would likely be a technical bounce, so watch for the bearish turnaround to follow through the price action momentum downwards.
Based on volume analysis (not shown here), a likely support range lies between 370-380.
Similar to the NASDAQ analysis, there is a possibility for further downside, but not apparent at the moment; so tentative expectation of a higher low is still reasonable.
