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SPY 1 hour harmonic pattern and longer term trend line in yellow are going to be areas where traders would look to short the market.
I could see a pullback going into the weekend with everyone going short again and thinking that 3800 is the next target, but this is also a prime area to start the short squeeze.
Yesterday based on the closing price of the gap was missed by .04 but today they closed it and are now starting to deal with the overnight highs that were put in on the ES futures chart.
ES futures 1 hour chart. Again I don't recognize this as any specific reversal pattern, however there are trendlines that are fairly obvious where traders would look to short the market.
If the trendlines break to the upside, that would initiate a short squeeze IMHO
My best guess right now is that we will possibly see a bigger move start next week Monday with a gap one way or the other.
One possibility is that the green box on the bottom could be seen as a double bottom.
Follow up from yesterdays SPY chart.
Had a gap up and then filled a gap above, then went back to fill the opening gap from today and then reversed to fill a second gap above.
The blue trend line and the 50 EMA also got back tested and held as support.
There is now a potential break away gap towards the bottom that the bears need to try to fill, if they can't it would be a bullish sign.
The situation now is set up for the bears to short the yellow trend line and there is also a potential for a harmonic pattern that is short term bearish.
Ideally it would be nice to see a move up to finish the harmonic pattern and then a pullback down to T2 at the .618 which would be a place to look to buy.
The other option would be just to squeeze the hell out of everyone trying to short this.
I really don't recognize this as any specific chart pattern, however the current chart has a lot of similarities with this chart from the Sept- Oct chart from 2021
Obviously charts can break out either way up or down. The last time the chart looked like it does now, it broke to the upside and has a series of gap up days for about an 11% move off the lows in about 50 days.
Wycoff video
Not really, I am always looking at possible patterns, and that is just a possibility for a target if it does continue to go down.
The rule of thumb on harmonic patterns is NOT to trade a pattern in progress, but wait to the completion of the pattern and look for a potential reversal at that point.
Critical area in the market, make it or break it.
Price just completed about a 15 hour accumulation pattern. All it needs to do now is hold above resistance as a show of strength.
It would also start to short squeeze any trader that shorted the H&S pattern in blue.
Or will this just be another failed attempt to rally? Need to see some type of bull flag form now at the resistance/support area, any break back below the area would be bearish again.