The SPY is currently facing significant challenges, with the largest ETF on the S&P 500 exhibiting several bearish elements that suggest a looming substantial decline.
Firstly, it is breaking out of a highly bearish pattern, namely a rising wedge. Although it ticked out of it yesterday, confirmation requires today's close to be below yesterday's closing price. Should this occur, it would trigger a breakout from the rising wedge, potentially leading to a massive drop in the coming weeks or months.
Moreover, the trajectory of the rising wedge has been slowing down with each new higher high since November/December, indicating that the upward momentum is waning, if not already exhausted.
The breakout observed yesterday, even without confirmation, was on significant volume, adding to the concerns.
Additionally, there are powerful bearish divergences on both the RSI and the MACD. The MACD is displaying new downward accelerations.
Considering these factors, and taking into account the higher-than-expected inflation rates in the USA, EU, and UK, coupled with the potential for a crisis in the Middle East, there is a 90% chance that the SPY will experience a drop, at least toward the blue dotted line. This level corresponds to the high from July, the high base area from December, and the 50-day moving average."
Firstly, it is breaking out of a highly bearish pattern, namely a rising wedge. Although it ticked out of it yesterday, confirmation requires today's close to be below yesterday's closing price. Should this occur, it would trigger a breakout from the rising wedge, potentially leading to a massive drop in the coming weeks or months.
Moreover, the trajectory of the rising wedge has been slowing down with each new higher high since November/December, indicating that the upward momentum is waning, if not already exhausted.
The breakout observed yesterday, even without confirmation, was on significant volume, adding to the concerns.
Additionally, there are powerful bearish divergences on both the RSI and the MACD. The MACD is displaying new downward accelerations.
Considering these factors, and taking into account the higher-than-expected inflation rates in the USA, EU, and UK, coupled with the potential for a crisis in the Middle East, there is a 90% chance that the SPY will experience a drop, at least toward the blue dotted line. This level corresponds to the high from July, the high base area from December, and the 50-day moving average."
Consistency is the key of success....
