SPY has reached a new top of 535. A confirmed break above this level is needed for a channel breakout and a test of the 550 but I see it as the fifth wave upside end, especially concerning the fact that is in the stick sandwich candlestick formation monthly (bearish one at the top). We had a pullback in the long-term fourth wave to 350 and after that almost 200 points upside the fifth wave. Learn to Trade ETFs profitably.
How to trade this?
It is a fact that a strong upside resistance for Q3 2024 is 535 and If we get a confirmed break above this level we could see a strong upside continuation and new highs. Near-term, short-trade entries have a higher probability of success. Long trade entries are possible only on a confirmed price-action break above 535. You can try a short trade here with a stop loss above 530. The short-trade entry has a good Risk to reward. For inquiries about account management please write to [email protected].
The Weekly SPY chart reveals a narrow medium-term rising wedge and price action reaching its top. At this point, it is advisable to look for the short trade entries or sell positions as they have a higher probability of success since we have a flashing five of the fifth wave end. We will need to see a big break above 535 to see an extension higher, and an invalidation of the complete downside reversal, and the extension of the fifth long-term wave higher. I am inclined more to see a swing down to 475 at this point, especially upon a break below 520 which will confirm the fifth medium-term wave top. We see also an increasing negative RSI divergence.
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As the famous trader says…
“Novice Traders trade 5 to 10 times too big. They are taking 5 to 10 percent risk, on a trade they should be taking 1 to 2 percent risk on.”Bruce Kovner
How to trade this?
It is a fact that a strong upside resistance for Q3 2024 is 535 and If we get a confirmed break above this level we could see a strong upside continuation and new highs. Near-term, short-trade entries have a higher probability of success. Long trade entries are possible only on a confirmed price-action break above 535. You can try a short trade here with a stop loss above 530. The short-trade entry has a good Risk to reward. For inquiries about account management please write to [email protected].