It appears that the SPY ETF has done a bullish volume spring today based on a comparison between two price swings and their respective volumes.
The first price swing I am referring to is the 6/23/2009 price swing that was on 188 million shares on the SPY ETF. The second swing of course is today’s price action.
What happened today was that price fell under the swing low of 6/23/2009 and then closed back up inside the trading range. Volume came in about 7 and a half percent less than the price swing of 6/23/2009. So this is a bullish spring and is indicative of a price reversal back up to the top of the current trading range we are in.
I suspect that we are going to make an attempt to fill the down gap of last Thursday or at least test it. That down gap could serve as short term resistance. The gap down price bar was on 212 million shares, not blockbuster volume but still in these slow trading summer holiday months it may be a challenge.
So the SPY ETF remains since beginning of May in a trading range situation. The market has not spoken yet until it decides which side it wants to break out of. We are building a decent amount of sideways cause here on the SPY for an eventual big move.
At this time I believe more consideration should be given to the fact that we are trading range bound here since May rather than the possibility that we have a head and shoulders pattern inside there.
So we shall see how things shape up for the rest of this week. Should be interesting.