SPY pure capitulation of bears, time for drop?
SPY day finished very strong but with too much hype as there was no reason for such a strong pump from a technical point of view, we had almost pure bear capitulation in the market when a lot of famous bears from the media said maybe it is a new bull market. And we all know what happened when bears become bulls and bulls become bears!
It is over-extended from al MA which indicates the possible drop.
Volume did confirm price action.
RSI is at its extreme and needs to cool down.
MACD has strong bearish divergences and likely will cause a drop.
Overall: even though SPY had a strong breakout of a falling wedge and is bullish at the moment indicators are pointing to its time to cool down. The trajectory of rise is stronger and stronger and that is not a healthy bull run. There is a huge chance the market will drop from this level.
Still, no matter what lot of things point to the imminent drop, the buy signal which we create yesterday in our Morning daily brief must stay until the close candle doesn't prove otherwise.
It is over-extended from al MA which indicates the possible drop.
Volume did confirm price action.
RSI is at its extreme and needs to cool down.
MACD has strong bearish divergences and likely will cause a drop.
Overall: even though SPY had a strong breakout of a falling wedge and is bullish at the moment indicators are pointing to its time to cool down. The trajectory of rise is stronger and stronger and that is not a healthy bull run. There is a huge chance the market will drop from this level.
Still, no matter what lot of things point to the imminent drop, the buy signal which we create yesterday in our Morning daily brief must stay until the close candle doesn't prove otherwise.
Consistency is the key of success....