Hey Market Pilot,
Since the market peaked in late March, I have called for the S&P 500 (SPY) to move to the daily 50 simple moving average (SMA). We have reached that area, and I gave the market the possibility that it could bounce at that support level. So far, price action has been very heavy, and buyers are not coming to the rescue.
Below is a screenshot of the SPY, where you can see price sitting on the daily 50. One thing to note is that the daily 8 is crossing below the 21, which adds to the bearish sentiment with the fast moving average (MA) below the slow MA. I’m still open to the possibility of a small bounce in this area, but it will probably end up being a little more chop until price is really ready to fall lower.
I also drew what we can see as a longer-term head and shoulder pattern, which adds to my conviction that the markets are running into serious resistance and are likely to go lower.
Of course, things won’t go in a straight line, so if we do end up getting a stiff move to the downside, watch out for it to get stretched, and we could get a strong bounce. But we have to wait for that and get the timing correct.
Your Profit Pilot, TG
