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SPY Retraces Most Of Last Week's Decline. What's Next?

Published 05/22/2017, 02:29 PM
Updated 07/09/2023, 06:31 AM

The SPY's 120-minute Candle Chart shows that the last Wednesday's and Thursday's plunge from 240.67 to 236.15 has mostly been erased.

The only level left for this rally to accomplish is to close Wednesday morning's opening down-gap at 240.08 and to sustain above the gap, which would indicate that last week's brief decline represented a completed near-term pullback.

Potential Upside Strength

If the upside continuation unfolds, then within the subsequent hours, SPY should climb above its March-May highs at 240.32 and 204.67, into new-high territory — which looks like it could unleash upside strength in the aftermath of a 2-1/2 month high level, inverse, corrective accumulation formation that will project to 245.50 and then to 248.20/50.

Only failure to close and hold above last Wednesday's down-gap at 240.08, and/or continue higher to take out the March-May highs, followed by a reversal that breaks 237.90 initially, will begin to compromise the current upmove and will leave SPY vulnerable to additional corrective weakness off of the 240.30/70 resistance zone.

2-Hour SPDR S&P 500

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