The Market (6/20/2024)

Good morning to all and good morning in markets!

Today is Thursday, June 20th and it's a great Thursday in particular because I will be going on Vacation this weekend! I am headed to the busy streets of New York City and am looking forward to an eventful weekend while spending way too much money on non-necessities. You could call me a professional US consumer hahahaha.

Jokes aside, I look forward to my trip and will make an effort to visit Wall Street, however it is relativly out of the way for me and I might not have time to take a look at big money with my own two eyes. However, rest assured we will get there some day!

With all that said, I want to take a look at some charts too see where we are at.

In a previous article I wrote back in May, I thought that the SPY may have been forming a Rising Wedge on the Monthly. This is a strong bearish indicator, however I could have never anticipated the strong economic data Y/Y and M/M released throughout the month of June which pushed the monthly candle above the Wedge with volume creating a new All Time High on the SPY.

With this new breakout, I expect some sort of retest of it in the month of July or August for more potential upside. Additionally, I would not call the SPY overextended to the upside yet, and the RSI agrees. The most bullush setup in this instance would be if the SPY were to fall back down to the 537s and reject off of it to the downside for more upside.

That retest would put the RSI in a great position and would align the technical aspects to establish a stronger confidence in a bullish outlook for the summer.

I have made adjustments to the chart to keep it up to date and for organizational purposes.

There are no notable structures forming on the SPY Weekly, however we can tel that the $523.92 Fibonacci level is an area of incredible strength and support for the SPY. Rejecting off of it 3 - 4 seperate weeks, the buyers were able to use this level to enter in positions and keep the price moving to the upside all while keeping the RSI under overextension.

However now at the current level, the RSI is beginning to suggest that markets are overtectended on the Weekly which may help the Monthly retest the $537s to try and find more upside in July.

The current Daily chart looks pretty bad on the SPY at the time of writng. Lots of wicks even for the larger time frame. This would signal that the past few days would have been horrible for Options traders with the exception of the previous Monday where the SPY finally saw some direction.

There is somewhat of a sharp rising channel here, however the largest factor would be the strong overextension on the SPY.

The SPY is currently rejecting EXACTLY off our $550.41 Fibonacci level on the 4 hour. The RSI is showing signs of weakness as the price tries to find some downside correcton after the many hours of continuous upside. There are some stong buyers at the $538.93 - $541.76 range. Sellers will need more volume if they want to try to revisit the liquidity at the range and especially if they want to start making some Lower Highs.

The 1 Hour looks weak here. It is clear the the buyers have been trying all day, but I think given the shorter trading week as well as other economic factors in addition to being at the All Time Highs the makrket might make a corrective move to the downside.

I know the indicator doesn't show it, but with my own eyes I can tell there is some hidden buying liqudity right here that is trying to hold up markets. It would be in their favor to let the market flow back to the downside to larger areas of liquidity and allow buyers to take profit and re-enter at better prices over the next few days rather than try to keep up this rally here.

I feel bad for those who decided to trade Options on the SPY that expire this week. Look at the previous trading day and look at today's trading day. There is almost no volatility at all and the market has been effectivly sideways for the prevoius 2 days.

There is a possible Bear Flag that has been forming at the Higher Lows of the previous trading day and today. This could be a strong indicator of a corrective move further to the downside and may even retest liquidity atthe lower $547s if it plays out. The probability of this Bear Flag working are higher than not, however nothing will happen if the sellers cant figure out a way to take the tape. If the Buyers keep up their resilliance, then the markets have a higher probability of just moving sideways on the day.

This is exactly what I am talking about. As I am writing this, I can see in real time the sellers trying to get through the 5 minute Buyers and fail 4 times already.

I'm sorry, but whether you're bullish or bearish, you do not want to see the buyers move the price back to the upside. That will mean more sideways potential and less room for increased volatility.

There is always the possibility that the buyers do pick up steam and start sweeping the shorts and changing the direction of markets on the day, but technically speaking, everyone wants the market to get out of its overextension for a better buying price.

The SPY on the one minute is finally finding some direction, however of course when I say that the buyers entered and are trying to sweep their way back into the range.

These sweep candles are exactly what make and break Options trades It took forever for a downside move, and as soon as it occured markets quickly answered back with a sweep nearly the size of the downside candle. Theta and IV are not on the Options buyer's side.

My guess is that this move back into the range is more of a liquidity grab. In other words, someone is hunting down stop losses. A move big money plays a lot of the time to take money from retail traders. If I am correct, then we should see another test for the lows. There are 5 areas of selling liquidity to the upside, if the buyers truly want to change the direction of markets on the day they will have to do so with immense volume.

Thank you for reading and all of the support on my previous article! I hope to continue to put out high quality articles that are consistant and effecient. There are not a lot of notable structures forming on the time frames as we trend around the All time Highs and thats apart of the markets and a reason why correction is good for all traders.

This constant fluctuation of up and down, buying and selling, sweeps up met with sweeps down and sweeps down met with sweeps up are not what traders want to see. Whether Stock day traders, Options traders or Futures Traders, these sorts of movements are what destroy accounts. So please be careful trading.

At the time of writing, the SPY is at $548.310.

Thank you again for all the support and I hope you all enjoy your week in Markets