A quick reading of the tea leaves before an early bedtime…SPY breakout shown above.
To my eye, this is a significant breakout. Volume did not meet the average, but I’m not surprised by that since it was the first day back after a major holiday.
The negative for the day was that SPY closed lower than the open, executing a slight “gap and crap.”
My guess is that we see a small pullback over the next couple to few days where price will revisit the breakout area at roughly $126.50. From there I expect a bounce and higher highs.
Conventional wisdom holds that should the SPY or QQQ breakout fail and the ETFs trade back into the triangle, this failure should be considered a stronger signal than the breakout itself.
I am looking to buy here on any weakness. My bullishness will quickly turn to cautiousness should the breakout fail.