Bears took control closing SPY at 305, S&P500 at 3050.33 (+/-). With this change of character and signals turning short-term bearish, we will continue to take risk off and sweep more profits to cash. Everything is short-term day trades until noted otherwise. Take fewer trades, while reducing your risk exposure.
SPY Renko Chart
Renko charts eliminate the “noise” only printing new bricks when the price moves a specified price amount. Each block is positioned at a 45-degree angle (up or down) to the prior brick. An up brick is typically colored white or green, while a down brick is typically colored black or red.. You can read more on the subject here.
Suffice to say SPY printed a red brick, therefore the trend is down short-term. Look for more red bricks or a catalyst to reverse the trend.
The dark blue arrows note the longer-term trends, with Renko printing short-term trends in the interim. In other words, the short-term trend does not mean we are starting a major downtrend. That call would come later.
SPY 60 Minute
As the Renko trend starts a bearish leg, look for bounces that fail to enter new shorts. We’ll keep an eye on levels below as support zones.
Note the volume by price (VBP) bands on the left side of our charts. Watch for reversals, support and resistance at these levels.
200d was the target yesterday, where prices bounced. Now the 50d (296.64 +/-) will likely get tested, unless an unforeseen catalyst reverses the trend.
Remember, yesterday we discussed July seasonality, the strongest month of the year for technology, so we’ll be collecting profits making ready for the anticipated bounce into the next few weeks.
As a side note, if you did not take profits into the past couple of weeks, don’t panic. Hedge instead, and use bounces to reduce your risk.
Join us today in the trading room for our LIVESTREAM broadcast during market hours, as we discuss the change in trend and navigate the current environment. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.
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