Is SPY Ready to Retrace?
Several indicators have been showing weakness in SPY's most recent price movement, and it seems that the consensus here on TradingView is that SPY is long overdue for a retracement to test ~$400. Volume has been shrinking day-by-day, and SPY dropped in the afternoon to test support at the 20EMA.
Across the major indexes, the market seems ready for a retracement before making new highs. I noticed that
NDX printed a bearish engulfing candle today on the daily timeframe. It looks to be a pretty good indication that some of those gap-ups (particularly on the NDX) from the past two weeks can be filled in the near future--which could easily reflect across the other major indexes.
My first target zone is the 50EMA ~$406, which also aligns with a .236 retracement from when price bounced at the bottom of the marked channel on March 25. My second target zone is ~$400, at the .5 retracement. This area served as a previous resistance zone, and could provide support for further upward movement.
Technical analysis aside, some interesting numbers were also reported this week across the economy:
U.S. Budget Deficit: Reported on Monday to have surged by $1.7 trillion dollars during the first half of the fiscal year. For March alone, the budget deficit totaled ~$660 Billion.
Inflation Numbers: CPI is up 2.6% from this time last year.
Higher Treasury Yields : 10 Year Treasury Note Yields sold at auction on Monday for 1.68%
Supply Shortages: Particularly reported in the auto industry, semiconductor shortages are causing a massive delay in production. Analysts predict that this shortage could cost the auto industry up to $61 billion if the shortage continues.
Coronavirus Cases on the Rise: Positive case counts are rising (+8% last week). CDC director Walensky insisted that Michigan should shut down again.
Unemployment Numbers: Jobless statistics are officially being reported tomorrow (4/15).
Across the major indexes, the market seems ready for a retracement before making new highs. I noticed that
NDX printed a bearish engulfing candle today on the daily timeframe. It looks to be a pretty good indication that some of those gap-ups (particularly on the NDX) from the past two weeks can be filled in the near future--which could easily reflect across the other major indexes. My first target zone is the 50EMA ~$406, which also aligns with a .236 retracement from when price bounced at the bottom of the marked channel on March 25. My second target zone is ~$400, at the .5 retracement. This area served as a previous resistance zone, and could provide support for further upward movement.
Technical analysis aside, some interesting numbers were also reported this week across the economy:
U.S. Budget Deficit: Reported on Monday to have surged by $1.7 trillion dollars during the first half of the fiscal year. For March alone, the budget deficit totaled ~$660 Billion.
Inflation Numbers: CPI is up 2.6% from this time last year.
Higher Treasury Yields : 10 Year Treasury Note Yields sold at auction on Monday for 1.68%
Supply Shortages: Particularly reported in the auto industry, semiconductor shortages are causing a massive delay in production. Analysts predict that this shortage could cost the auto industry up to $61 billion if the shortage continues.
Coronavirus Cases on the Rise: Positive case counts are rising (+8% last week). CDC director Walensky insisted that Michigan should shut down again.
Unemployment Numbers: Jobless statistics are officially being reported tomorrow (4/15).
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