Charting the SPY Reversal
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Charting the SPY Reversal

Henry Gambell - February 1, 2016

Good evening everyone. This is Henry Gambell with, and in tonight's free video, I wanted to look at some very basic technical analysis on SPY. This is the ETF for the S&P 500. Some very basic indicators on it.

The first thing that you'll recognize is that we're below the 200, 100, and 50 day moving averages. A very simple take on technicals, but it's showing us that we're in a bearish trend. Of course, Friday was a massive reversal. SPY was up almost 2.5%. Is this enough to shift the trend? We've got a lot of interesting things to talk about with this.

First, we'll look at symmetry and price. If we go back to look at these various rallies--I'll consider these--some events are past. But if we're comparing all of these previous rallies, you'll see a lot of confluence where they came in at those previous highs, but eventually were able to push up through them. Kind of building a story here that we'll follow with into the end of the video. But all these previous major swings were eventually cleared.

There's one last one I'm going to look at here. You can see right where the SPY ended on that on the day. That's really the last level we can vouch for. S&P futures are down a bit, but assuming they open positive on Friday, you'll be able to clear that resistance.

What's the next thing? Start looking for areas where this might decline. First I want to look at our fib retracement, so I can measure the 6-1-8 of this move. Then start looking at timing. All this is suggesting is, if the indexes seen previously that we rally for a given number of days--here it's at 10 or 11--we could do exactly the same thing.

So in my mind, what I'm curious about is, having cleared the first bit of that bearish symmetry, can we go on into the 6-1-8 retracement? And then also possibly see that correlate with time? It's hard to say, since we've got so many earnings this week, but basically what this work suggests is that if we look at these previous swing lows and swing highs, if we're going to see a failure, it would make sense for it to come in right in the middle of the week.

So Monday, it opened. Let's see what results we get from Google earnings, and then I'm going to be giving a lot of thought to failure in the middle of the week, here on $197.73. Obviously anything can happen, and we take this analysis a step at a time, but as you start to clear symmetry, we look a little more for the 6-1-8, and comparing that to the rallies that we've seen in time, I think we will see some strength at the middle of the week, and then we will take it from there.

I hope that helps. Gives you guys some things to look at as you get your week started. We will see you at the next free video.