Short-Term Outlook on the SPY

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I had been viewing SPY as forming a consolidating wedge over the last month, which would resolve hard to the downside. However, since we haven't seen any consistent selling, I want to introduce a second structure that may be developing.

And while it does involve slightly higher short-term highs, it's actually an even more bearish structure, a rising wedge (orange), even sometimes called an "ending diagonal," because it's the end of a move up.

On the chart, I have also placed a green horizontal line representing the bottom of the February gap from when the first crash happened (325.85).

My intermediate and long-term outlooks both remain unchanged: I expect terrible moves to the downside, just probably not this week.

Penafian

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