As one might expect, there is no change in the short-term or medium-term trend. SPY gapped up five days ago and formed five indecisive candlesticks. There has been little movement from open to close. Post-open price action has been choppy as the ETF trades near its Nov-Dec highs. Not only do we have a five week consolidation working, but we also have consolidations working intraday. It is a standoff between bulls and bears right now. Despite this five week standoff, the bulls still have the edge because the medium-term trend remains up.
On the 60-minute chart, SPY has been edging higher since mid November. The ETF is holding the gap/breakout above 110.5 and trading near resistance from the early December high. I am going to leave key support at 110.4 for now. I could raise it to 111, but this may be asking for a whipsaw. The bigger trend is up, seasonality is bullish and the Fed meeting has passed. As such, I will keep a bullish bias as long as support at 110.4 holdeth.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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