SPY Downside Targets

SPY’s plunge in the last half-hour of trading on Thursday makes me think that we might be looking at a bear-flag pattern. So, if the market doesn’t like Friday’s economic reports and continues downward, then this 15-minute SPY chart of the past week shows some likely targets (click to enlarge):

A 78.6% Fibonacci extension (red “X”) would have SPY testing its July rally line (red). You can’t see the whole line on this chart, but it is the same one as the lower line on the QQQQ chart below.

A 100% extension (black “X”) gets SPY into the vicinity of its July 22nd gap (black box), the top of which is 108.33.

And a 161.8% extension (blue “X”) would see SPY filling the gap at 107.10, which was SPY’s close on July 21st.

And now for a bullish scenario: At the black arrow on this 60-minute QQQQ chart, you can see that the Q’s successfully tested their July rally line Thursday afternoon:

Is that enough to satisfy Ms. Market? If so, and the market rallies, then the Q’s might head for the top of their rising-wedge pattern at the blue “X” up around 47.00.

60 Responses to “SPY Downside Targets”

  1. admin says:

    String,

    Brilliant UWM/TWM trading yesterday. That’s the kind of flexibility to which every day-trader should aspire.

    Matt

  2. George says:

    SPY gap… Ah, that’s where I need DOO.

  3. George says:

    WTG Stringm!

    Now code that logic in SD and we’ll have it made in the shade.

  4. Mitch says:

    Thanks for sharing String. I always appreciate a good trade management story! I promise to share mine. BTW, I’ve got a binder with some trading material in it. I’ve titled the binder, “Luck or Skill?”

    Matt,

    Withholdings really are a key metric. It’s been fun watching it get ginned up! GDP gives us another frame in the film.

  5. Stringm says:

    Matt

    You should appreciate this.

    String

    http://tinyurl.com/29ym8vy

  6. 2thfixr says:

    Pre-market SPY is finding support near the lower RED line (after breaking through it and recovering it). I’m watching 109.07 SPY very closely.

  7. 2thfixr says:

    Again, a very large buyer on the SPY’s just popped the 1-min bar by 50 cents (nice market order..fill, fill, fill!) and at least 2M shares.

  8. phil says:

    2th

    bought SCHX

    sold IEF

  9. phil says:

    2TH

    STOCK decline is corrective but the rallies look corrective …what does that tell you???

  10. phil says:

    going to take profits on SCHX on this push up

  11. phil says:

    G

    5 little waves up now … surging again….going to hold long from 1089 until i see weakness

  12. phil says:

    doubled long position….stop it all at 1094

  13. 2thfixr says:

    P
    If each move is corrective:

    Two options: 1) the 1120 top was an ED and this decline is a LD.
    2) We are in a triangle.

    Good job catching the surge. Off to the golf course.

    I personally see lower highs and lower lows from the 1120 high.

  14. phil says:

    G

    look how valuable the 200 per ma is on SPY 5 min….good for intraday trading

  15. George says:

    p

    FUnny, I was just looking at that on the 60min time frame and it did the same thing.

    http://i31.tinypic.com/22m3af.jpg

  16. phil says:

    G
    2TH

    done for today….have a great weekend………..hasta!

  17. phil says:

    G

    was just going to turn off computer and saw surge…raised stop on double long position to SPX 1099…… wooo hoooo!!!

  18. 2thfixr says:

    off to the course….
    Looks like another bear flag (wedge) formed on the SPX… mostly cash, holding 500 SDS in trading account.

  19. George says:

    p

    That was a good gap to fade. Nice going.

  20. George says:

    Stringm,

    Take a look at UYG daily on SD, then on another charting system like StockCharts. They sure are different. Am I seeing things?

  21. Stringm says:

    George

    Sorry I have been out. Well pump controller problems. Wire on a capacitor burned into. On my way to the pump repair outfit. I looked at SD, TOS and Stockcharts, and I don’t see much of a difference other than the spacing effect. I looked quick though.

    String

  22. George says:

    Stringm,

    Thanks. I can’t figure out why mine are different. I’ll trust StockCharts.

    I have a well at my farmhouse. It is an above ground pump. Easy to work on. Hope yours is a quick fix.

  23. Stringm says:

    George

    I am waiting on the man to call me that fixes it for me. I seem to have a summer visit to him every year. Fire ants were the root cause, but the wire being burned is what is keeping it from coming on. It will take him about 20 minutes to analyze and fix, then cost me 60-100 bucks. Every summer just like clockwork!

    String

  24. George says:

    Fire ants? Good grief, things ARE big in TX, huh?

  25. phil says:

    G

    came back at noon and saw overlap at 1099…sold 1/2 schx…wait and see on the rest….

  26. phil says:

    G….

    fire ants are tiny………..

  27. George says:

    I put coffee on fire ant mounds. It doesn’t kill them but they wander off looking for donuts. :)

  28. Stringm says:

    George

    Yes they are tiny, and they have a perverse code, they wait till all of them are on you before this first one bites, then they all have a go!

    String

  29. George says:

    Yuck!

  30. admin says:

    String,

    Yes, Henry-Ford style capitalism, where workers are well-paid, is what we need to get back to.

    Matt

  31. Stringm says:

    102 bucks and I have water again. This is trading like an OPEX Friday, but it isn’t what gives? The second round of QE is bound to be right around the corner. Will that mean Phil gets his SPX1600? Gold to 2000, who has the answers? I need to know ahead of time.

    String

  32. admin says:

    TLT just broke above its morning highs. Might not be a good sign for stocks…

  33. admin says:

    String,

    It’s not just today. DIA is an hour away from printing an NR7 on its weekly chart. So, the whole week has been very tight.

    Matt

  34. admin says:

    SMH is about to print a bearish engulfing candle on its weekly chart. That is also a bad omen for the market.

  35. George says:

    Month-End effect is in effect.

  36. admin says:

    Stocks are defying bonds…

  37. George says:

    Phil bats a 1,000 again!

  38. admin says:

    Maybe TLT is just getting bought for the dividend play on Monday…

  39. Dressguard says:

    Bad signs and bad omens for the market. But the market is printing a green candlebar. Look at me!
    :mrgreen:

  40. George says:

    See ya, Mr. Green Jeans. Green with envy. :)

    First the shorts cover, now the longs cover. Happy ending for a wealthy weekend.

  41. phil says:

    G

    just got back…the correction could be over and we gap up monday but i am going to sell more schx to play it safe…i see a double zig zag but there could be one more low…….ie a triple zig zag…hasta!!

  42. George says:

    p

    Nice. Nothing like making profits while playing.

  43. George says:

    Dressguard,

    Your avatar face sez it all! :D

  44. George says:

    I kept waiting for the SPY hourly to kick it up a notch and go above its 36MA but it was stopped out two times. The MACD hasn’t crossed yet either.

    Since it recently had a 9/36/60 to the downside, it could take some effort – if it’s going to do it at all.

  45. George says:

    Yikes. DOW just a smidge red while SPX +.06.

    P, there’s that great timing again. WTG.

  46. Mitch says:

    Another great week guys. Thanks. I hope you all have a good weekend.

    After,

    Where will this year’s NHL All Star Game be played?

  47. 2thfixr says:

    Phil, did you drop TBT, accumulate more, buy zeroes? Inquiring minds want to know. Thanks.

    Bought more SDS at $32.30 and the 60-min 36 MA held as support, so didn’t get stopped out like George. As I said this AM, I see lower highs and lower lows from the 1120 peak. When that changes, I’ll stop playing with SDS.

    Shot 79 today and had a great time. Hope you all had a great week and enjoy your weekend.

  48. stringm says:

    Gang

    I love you gals/guys and I always will! I am turning my main IRA account over to a money manager. I plan to focus on option trading big mover stocks like AAPL, etc. I am going into a retreat mode prior to the transition. I wish you all well. I will be dark for a long while, and I am sure that will not be of major concern to anyone. I really enjoy the group here, and heck I don’t even know if you are real. You might all be split personalities of Matt, but I still love y’all. You all have been a hoot to talk too. I hope everyone suceeds at their endeavors and moves our country in a positive way. I will be back at some point, so as Roy Rogers once sang, ” Happy trails to you until we meet again”

    String

  49. stringm says:

    My last post for a while, and I can’t spell succeed. Oh well, y’all are used to that! Have great weekend, and don’t take any wooden nickles!

  50. admin says:

    String,

    Good luck with the new strategy, and see you soon.

    Matt

  51. 2thfixr says:

    Good luck String in the option pits. Let me know when you get out to PHX so we can drink a beer and bet the dogs. :-)

  52. George says:

    Stringm,

    We’re gonna miss you dude! Check in from time to time.

    Best Wishes

  53. George says:

    Shhhhh… don’t tell anyone, (Stringm is actually going off to write a book called “Texas Taters and Tall Tales”; subtitled, “How To Eat a Drunk Texas Chikin”).

  54. Mitch says:

    String,

    Thanks for all of your sharing. Enjoy yourself.

    Mitch

  55. Dressguard says:

    Another one bites the dust. Everything gambled away in daytrading.
    :mrgreen:

  56. admin says:

    Dressguard is now blocked. Not exactly the team-player type…

  57. stringm says:

    Dresser,

    I hardly gambled everything away. I just want to focus on something I have been working on. I decided that it was easier to turn over my IRA to a money manager. It is an actively managed account, and I have a good feel that they are headed in the right direction. The fund has a little over one billion under management, and I like their approach. It is hard to get a million dollars invested on a daily basis, so I decided someone else should handle the main account. So you can sleepwell knowing I still have a few coins. I also will still be gone for a while, and I wish everyone well. Great crowd here, You’re OK in my books too. Them teeth do need brushing though. Maybe Tooth can refer you to someone. Hope everyone has great weekend . I worked my butt off today, and have a little sunburn glow working.

    Str

  58. stringm says:

    And another thing before I go in the dark. I like Liz Warren a lot! Woman tells it like it is. If you regularly email your representatives, like I do, tell them she needs the job.

    String

    http://www.nytimes.com/2010/07/30/opinion/30krugman.html?_r=2

  59. after says:

    Mitch, re the all star game, enjoy it, smile…