SPY Reversal is Building – Show Me The Money
When we wait for SPY to reverse like this morning is indicating, we change to “Show Me The Money Status” as the preceding trend is still bullish. After 17 days of crazy buying, driven mostly by fund managers, we had our first “bearish trending” day. A leg down is possible if earnings cannot capture the attention of investors.
SPY 60 Minute Reversal
The last hour of Tuesday trading saw shorts covering after a massive (-5) point drop intraday for the SPY. S&P 500 futures were off by more than 50 (+/-) handles as well. News ALGOs helped the SPY close with a bullish candle just below the 20ma. Morning session highs had price action hovering above the 20ma (264.20 +/-). The breakout zone at 259.19 (+/-) is short-term support, for now, coincident with a 23.6% Fibonacci (DEC26 low to Friday pivot high).
TICK needs to turn back up if you are bullish today.
This morning Futures are currently green (2642.38 +/-) pointing to a reversal, as AMTD, IBM, UTX, CMCSA, ZION, and PG report positive earnings flow. All of these stocks are higher in early trading, as we start one of the busiest weeks of the current earnings cycle. KMB and IBKR are a bit lower post-EPS. LRCX, XLNX, URI, LVS, TXN and CP report tonight after the bell.
SPY Weekly – Bullish Momentum
We try to steer clear of predictions when we consider potential price action. That said, bullish momentum is present in MACD as histogram nears the zero line. A bullish crossover is likely if nothing changes. Resistance ovehead at 270 (+/-).
All things considered, earnings could help propel the index ETF higher, especially if Congress acts to put an end to the current government shutdown. Politics and trade policy are the impediments. Sales and earnings are good.
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