I am glad that I kept the BOT Short Signal live as of my previous posting. This appears to be the correct decision now. The SPY ETF and the sp500 appear to be staging a very weak day after Thanksgiving attempt to move higher. It is not working. I don’t know if this market was fed some ‘dry turkey’ yesterday, but for now it looks like it was and is in a bad mood now.
This very well could be an A B C down move and is further supported by the continued rally in the US Dollar today. I just do not see how this market is going to be able to completely ignore the rallying US Dollar index.
Still, the SPY for now is holding ground in the middle of the range and still has some recent ‘higher lows’ to work with.
I don’t know if anything significant is going to come of the US and South Korean military exercises that will occur this Sunday, but I would say that the timing for them to do such exercises is HORRIBLE. Murphy’s Law says that what can go wrong will go wrong. Will North Korea finally do something for real and take a shot at some US war ships this Sunday and send the futures limit down Sunday night? I don’t know, but the tape is showing at least some possibility of setting up that way right now.
On the other hand the downside volume is showing extremely light today which of course is no surprise.
So I will still stick with my earlier tack on the sp500 that 1201 or higher will switch me back to a BOT long signal, but as long as we trade below then I will keep the BOT short signal active.
The chart of the SPY ETF above shows that we are sitting right on up trendline support and perhaps getting a bit too comfortable near this range. The long horizontal yellow line shows 117.54 as a very key support area that must hold to maintain the bullish posture going into next week.
I have drawn in the ABC type move that I am expecting to occur sometime next week.
Also important to keep in mind as I alluded to in previous posts is the shaping up of the monthly November candlestick. That will potentially become very important as we finish up the first two trading days of next week that will close out the month of November.
If we look at stocks like AAPL, AMZN, NFLX and the SMH semiconductor index, it would seem to contradict any bearish sentiment I am expressing in this post. So remember there is still always the bull and the bear side. The SPY finds itself in a sideways rectangle trading range that can either break above the range or below it. At this point I am speculating that it will break through below it, but we must let the market show us the way next week for more confident trend signal.