The practically textbook Fibonacci retracement is calculated from October 2008 when the downtrend started to March of 2009 when the market bounced.
What's really disturbing is the giant Bearish Engulfing candlestick on the weekly chart. The Bearish Engulfing candlestick is so huge, it just about completely knocks out the prior 2 week upward move on SPDR S&P 500 ETF (SPY). Moreover, the 13 week MA is about to break down below the 21 week MA and close the neckline on the Bearish Head and Shoulders Top I studied in a earlier episode.
The main support zone you need to keep your eyes on is from $104.50 to $105. If this support mark is broke bulls will panic and run for the exit as short sellers march in.
The volume over the most recent week reveals a awfully bearish stepladder structure where a greater and greater number of sellers kept exiting the S&P 50 as preceding short term support zones were taken out.
On the hourly chart we have already had the alligator jaws widening to the downside on the moving average lines. We will see the alligator jaws first on the hourly, then on the daily, and last on the weekly. Worse, the 8 hour moving average line is acting as resistance all the way down as a greater and greater number of bulls go out of this market.
Looking meticulously at the hourly chart we can notice that a minor support region exists at $105.60 to $105.90. If that's taken out, then we'll shut the neckline on the Bearish Head and Shoulders Top pattern and hit the next support area at $104.60 to $104.70
In this video I perform technical analysis on SPDR S&P 500 ETF (SPY) in 4 time frames: weekly, daily, hourly, and 15 minutes. My objective is to explain to you precisely why I have downgraded SPY to be in a downtrend.
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