A Bearish Caution

The market has no doubt been strong over the past few months. However, a recent development has me worried, at least short term about the market’s strength. I still think on the longer-term charts, the $SPY looks solid/bullish, however, when looking at the daily, there’s two things I don’t like.

For one, we put in a (for now) lower high on Friday October 5 (Jobs day). We gaped up but the gap was met with sellers. This has happened in the past twice, in which a pullback did not take out the previous high (which was later met with a sell-off). I’m not saying this will happen again, but it is something to keep an eye on.

The second thing that I think is a bearish caution is the face that we are breaking below the uptrend channel I have drawn. I’ve been watching this channel for the past 4-5 months and we have yet to violate it on the downside on the weekly time-frame. It will be important to see where we close on Friday.

Other things I will be watching is for a close above the $143 level and the 50 day SMA.

$SPY - SPDR S&P 500 Daily Chart 

 

Tags: $SPY $SPX

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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