SPY Update + Learn & Understand the concept below!!Red vs. Teal has been the storyline for this downward momentum and it continues to be as we saw a strong hold from (bullish) red earlier in the week and after rejecting off of teal yesterday, this subsequent gap down that we're currently seeing.
If we've built enough bearish liquidity utilizing our green controlled buying, we can see this dump penetrate this 547 support level and continue deeper with a mid-term target in the low $500's.
However, if sufficient liquidity hasn't been built, per the laws of S&D, we will need to continue higher for a bit to grab more sellers and soak up more buyers prior to that penetration.
Whenever the move seems too obvious in the market, expect it to look that way purposely and for it to be a trap. Get you to sell when it's so obviously bearish - and then the market pushes up as you realize that everyone who sold is the reason why it's going to now push up - big money will force you and the others to buy back your sells at a higher price/loss and that's where big money then swoops in, when things maybe started to look a bit bullish, and pushes the market down by selling back to you all your stop loss buys in one fell swoop!
Learn this concept, understand it, and your trading will change forever. That knowledge combined with an understanding of how the algorithms inform the market's liquidity, is why I draw so many lines on my chart.
Happy Trading :)