SPY’s chop has set up the new battle lines to break before a big move

Chop has been the name of the game for the last 5 days. The S&P $SPY has been trying hard to break through this tough area of resistance at 428.60-429.13. But has failed to each time. It looked good on Sunday evening but that rally failed and so did any attempts today.

Good News: Upward Trends and Market Calm

There is good news for the bulls. SPY is on a 3-day uptrend, which is barely an uptrend. More so it has shown an ability to bounce off the 424-422 level which is starting to form support

Waiting for the Next Move

The recent price action has redrawn the battle lines of where the next trend goes. If SPY can get above that resistance it can look to get 435 and the gap at 437.50. This would be a bullish trend and would give the bull something to talk about. But with the new support levels established if the market decides to take a nosedive, it’s not too hard to spot. Just keep an eye out for it to break through that support at 424-422.14. If that happens, 420 and 417 are possible.

What’s Next?

Our trade thesis remains long since our data shows after the oversold signal says we could have more upside. But we are no longer oversold and resistance is holding up so our stop remains below the key support at which time its an easy move to be being a bear.

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