It has been 5 DAYS and the market can't break lower! The S&P 500 has pierced the June low 3 times, but NOT on a closing basis!
Other indexes, not the S&P 500, have made NEW LOWS on a closing basis. But the SPY is the primary hold out. The news has been trumpeting new lows, which in charting is really bad at this stage, to scare investors to sell.
But if its such a terrible market, why is the S&P 500 levitating for FIVE DAYS above the June low, barely, on a closing basis? This is why I use the SPY as a gauge, it has a broader representation on the core 500 companies in the USA.
The market is either trying to build energy for an epic fail, which would likely be Monday morning, or a 'come back'. .
This weekend is shaping up to be the decision. I wrote a week ago we would know Monday, but here we are! Who could have guessed multiple market indexes would fail, but not the SPY 5 days later?
Don't get me wrong the US and world markets will be sliced 20% lower in the next 6-9 months, and I think 70% lower from here is in the cards. But for now I am looking to get short on a rally, I may buy some short instruments today incase Monday is the epic fail, but without leverage. The leveraged ETF's should get hammered on a relief rally due to the various indexes failing this week, and running 'time off the clock' 5 days later.
Charting wise an SPY closing below 362 its bad, indicating going lower 20% in quick order. But dancing on this June low for 5 days makes a 'new low' squishy now, this line doesn't have the same meaning as it did on Monday. There is now wiggle room!
A perfect close will be 359.50-361.90 range, making it a coin toss for Monday, nobody will go all in in either direction unless you like to put your life savings on lottery tickets hoping to pay off.
A break below 359.50 on a closing basis is as good as any bet you could make that there WILL be in quick order a 20% haircut!
Good luck!
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