SPY Update

The S&P / SPY is doing well this morning and early afternoon, I would warn not to expect a straight line move higher, although as shorts are squeezed you will see more moves like that, right now it's still early in the day at 12:35 and I'd expect some more volatility and chop and we should see a strong close. 

The group that has the most representation in the S&P around 22%, Financials, are doing well so far, actually outperforming the S&P a bit and moving in to that triangle they broke below Friday which is the first step of locking in the head fake move. Since we've taken a good look at the NASDAQ, I figured why not the SPY considering all the weight in Financials.

 This is actually a very nice bear trap set up, the SPY looks like it's making a move higher that fails and breaks support, that gives shorts extra confidence to enter the SPY short, now the SPY is back above that level in which many would have shorted and we know this from other evidence like the StockTwits stream Friday where everyone was turning bearish.

You'll see this set up in 3C as it happened, it's hard to believe its natural.

 Here's this morning's SPY gap fill move and higher from there, we're close to some resistance so there should be some consolidation in the area, shorts won't be nervous until that first level of resistance is broken, then they'll start to worry and price moves will be stronger.

 SPY 15 min chart is picture perfect for a strong swing trade on the upside.

 SPY 10 min looks similar.

 Here's the set up I mentioned above, a positive divergence sending the SPY higher, an almost immediate negative divergence on the gap higher and as SPY breaks support, another positive divergence, the red arrow today was the opening for the gap fill.

 Short term 5 min is leading positive in a big way to new highs on that break of support.


However, like the other averages, the big picture looks very different....

4 hour leading negative SPY