As technical traders and researchers, we’ve been paying very close attention to the GREEN ARC Fibonacci resistance level on the SPY as a key level for the US stock market and any hope of a continued upside price rally. The SPY has traded near this level for the past three weeks and appears to be attempting a bit of an upside breakout right now. Yet, we understand a long holiday weekend is upon us in the US, Memorial Day, and after a big upside GAP on Monday, the US stock market has stalled over the past few days. We've also include charts and analysis for the Russell 2000 and the Transportation index.
Our researchers believe this GREEN ARC is still acting as critical price resistance and believe the SPY may sell off into the end of the week resulting in a failed attempt to breach this key resistance level. If this happens, the failed attempt to break this resistance could prompt a change in price trend and initiate a new downside price trend. If this resistance level is broken by the end of this week, then we have a pretty solid indicator that continued bullish price trending may continue.
Absent of any real news that may drive the market trend this holiday weekend and with most of the US still in shutdown mode, we believe the US stock market has continued to trade within this no man’s land area for many weeks now. From the end of April till now, we’ve seen moderate upside price action in certain sectors, yet other sectors continue to show signs of weakness. Continue reading "Critical Price Level Could Prompt A Big Move"
