Weekly Round-up: SPY ended the week up .53% below its highs for the week. Overall the market did trend upwards but Friday’s drop negated a good portion of this rally. The upwards price movement was just from Tuesday to Thursday. Wednesday, SPY broke through key resistance and its bullish triangle pattern. The skepticism of the Triangle breakout was quickly realized on Friday when the market dropped back into this triangle. This rally was support by two things one a drop in the dollar and a rally in oil and ag stocks but Friday’s drop was supported by weak financials. The price action today was able to identify more resistance level and support levels, which will give us a better idea of what to look for during this week.
Support Holds: Going into last week the 134.85 to 134.44 was key support for the market. Monday this level held and Tuesday the bottom of this support range was tested. Tuesday the market bounced off the bottom of this range and started the breakout. The strong bounce off this level set up the SPY’s midweek rally. After breaking out SPY restest its breakout/new support level at 135.89 which was once resistance, this level held and allowed SPY to bounce to the highs of the week, where the resistance levels there proved to be to much.
Resistance Levels Tested But Not Broken: On Tuesday SPY was able to get above 135.89 which started the breakout for the the week. Midweek, SPY broke above its resistance zone and even broken out of its triangle. This should have been bullish for the market but these resistance levels were too much and SPY ended up closing right at its breakout level for the week. The resistance at 137.86 held and further identified a key resistance level.While the market did break above it SPY did not spend to much time there as SPY sold off above this level. The technical damage that SPY did early in the week where it looked like the bulls were getting the upper hand was negated with Friday’s close. Friday’s closed sent SPY below all three of the key resistance levels from 139.96 to 137.86.
Overall: The price action showed the significance of the resistance zone above 137, but created a new support level at 135.89. This sets up a tighter price range of 139.96 and 135.89, these two levels will be important to watch early in the week. The 135.89 level this week will also make the uptrend since June.
Stay Tuned for Tonight’s a look at the week ahead.