Conclusion for today’s SPY analysis:
A break below ~284.93 implies continuation of bearish trend.
The 1 hour timeframe of the S&P 500’s ETF (SPY) is presented in today’s analysis with main focus placed on chart patterns that are currently active.
The uptrend in the SPY from its December 24, 2018 low to its July 29 peak has been followed ever since by sideways market action. Evidence of the ranging environment is provided by the horizontal blue lines that capture the meandering price action in the SPY since July 26, 2019.
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Besides, a wedge or diagonal chart pattern is also shown for the SPY as the alternative chart pattern that is active. October 2, 2019 saw price close outside the lower boundary of the wedge (i.e. confirmation) that suggests lower price to follow.
Meanwhile, the breakout below the lower boundary is still contained inside of the ranging environment that has lasted over 2 months. A rectangle top formation would be appropriate to describe the sideways movement which opens the possibility for the SPY to reach its lower boundary (i.e. ~282) as a minimum expectation.
Also plotted on the 1 hour timeframe chart is the 200 moving average. A retracement to the average and lack of a price close above it also carries bearish consequences for the SPY.
Price breaking below ~284 and also the lower boundary of the rectangle top formation could see price return to the origin of the wedge at ~273.
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