With the 200 day simple moving average delineating bear and bull markets, the SPY closed just a penny into bearish territory. However, the $SPX did close above its 200 day moving average.
The downtrend line (light blue) has been broken, and the upper Bollinger Band has turned upward. It is possible that we could be seeing the beginning of an extended move upward.
The lower four panes all show various measures of volatility. With all of them decreasing or stable, this environment would make it easier for the market to go on an extended run.
On the other hand, volume has decreased each day as the market has move upward, and the markets are likely to experience some resistance in the area of the 200 day average. Also, the June high is likely to provide some overhead resistance.
In the very short-term, I think the market has a day or two of steam left before there will be a pullback or consolidation. It will soon be time to look for short setups to catch a few days of weakness.
In the intermediate term, the market needs to clear these areas of resistance. Should it be able to trade above the 200 day average and take out the June high, we might be setting up for a late Summer rally that would take us to the area of the April high.
Thanks Woodshedder
Always great insights! And thanks for more ways to see volatility.
Can someone explain what goes on with the market makers and the strange-looking trades always popping up on the after-hours tape? (For example, look at the 1min chart for SPY recently.) These outliers print long tails well away from the current BID/ASK prices and look suspicious. Block volumes are sometimes huge compared to normal trading hours, and prices are often at fractional-cent increments. I can understand correcting an occasional punch error, but this is something different. WTF is going on? Looks like big money manipulation to me. Most importantly, can these tails give a clue where the market is heading?
I’m not in front of my platform but I’ll take a look tonight and conjure up my best theory.
Thanks. Kick it around with some of the PPT brethren and see what they think as well.