SPY is testing the strong upside consolidation resistance of 410 which is also the triangle resistance. A target higher in the medium term could be 450 if we get a break above 410; in the case of a reversal lower, we could see a test of 380.
The weekly SPY chart shows a possible upside channel forming along with the triangle. As we saw from the monthly chart, a higher breakout is also a valid probability in the case of a confirmed break above 410-420 but a symmetrical triangle, in this case, could be a continuation lower. Either way, we will have an excellent trade setup long or short.
As the famous trader says…
“The four most dangerous words in investing are, it’s different this time.”
Sir John Templeton
How to trade this?
Obviously, for Q2 2023, we have this upside resistance of 410 which should be broken higher for an upside continuation. This means that now short trade entries have some advantage over long trade entries as the overall long-term trend is still a downtrend and a symmetrical triangle has a bit more space. You should open a short trade here first. The risk to reward on this trade is higher than 1 and the timing of the trade could be on Monday NY session with the stop loss above 415 to target 380.