Is this a bull trap on the SPY?
Hi guys, i’m out with another post on the SPY. Yesterday, we saw there was a rally on the SPY and there was a price rejection from the close on the 6 Sep. If you look at the intraday chart, the market was trying to fill the gap up that occur from the close on 09 Sep to the open on the 10 Sep. SPY then proceeded to rally on before finding some resistance from the price area of $555.04 to $555.56, which happens to be where the symbol SPY was bouncing up and down on the intraday chart from 22 Aug to 30 Aug, trying to make new high before breaking to the downside. What are resistance and support area? Support area are areas whereby buyers potentially come in to bring the prices higher on an uptrend while resistance areas are areas whereby sellers potentially come in to bring prices lower. A support area might become a resistance level in the future and vice versa once the level is broken.
This also happens to the 61.8% of the Fibonacci Retracement level from the recent high to the recent low.
So what I will be doing next? 1) See if it closes above yesterday high, if closes above yesterday high, then SPY will most likely rally up higher. 2) If it closes below the last 30 minute of yesterday low, then i will observe the next few candles. If price action tells me that that it is going lower, then i will continue to have a bearish sentiment.
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