Diary of a Financier

SPY update: One more seasonal swoon before YE rally

In Capital Markets on Tue 10 Nov 2015 at 17:35

Just wanted to update what I’m seeing in the S&P 500 this week, as well as my outlook…

$SPY (208.5)SPY 15min/daily/weekly 2015.11.10

Primary pattern:
daily rising wedge breakdown
w 199.5 support target (-4.3% fm current) @ classic 50% Fibonacci retracement
1x bull divergence

Short-term:
15-min tilted H&S top
nearing R shoulder resistance > 209.5 (+0.5% fm current)
w neckline support > 207.5 (-0.5% fm current; -1% drawdown)
1x bull divergence

Conclusion

Following normal seasonal patterns, the signals from exuberant sentiment, and the troubling breakout in $CNY, technicals are setup for a small drawdown (average -1.25%) through the remainder of November, followed by a material rally (average +3.0%) into year-end.

–Romeo

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