E S&P 500 SPDR ETF - SPY Observations

I've thought it would be a great idea to take a look at the S&P 500 SPDR ETF or SPY. That allows us to observe some other shapes with this ETF as the market trades in the RTH (Regular Trading Hours / U.S session) rather than the Futures contracts which trades in the ETH (Electronic Trading Hours / Globex) with an overnight session. Anyway, let's start off with the weekly perspective.

Looking at the weekly periodicity we can identify a current balance area first and foremost. The market heading towards the bracket high currently. To be noted is also an inside week and an inside week failure which should be a bearish sign. Therefore we can still expect a behavior of absorption around the current prices.

Moving forward to the daily perspective we can observe a break out of a balance area as the market opened and closed above the bracket. This could lead the market to fill an open gap which is placed above the bracket. With a look at the hourly periodicity we can spot a rotational behavior yesterday. That's a sign of absorption as the market tries to battle it's way up or back to the balance area. There is still an open gap lower which should be an area to revisit soon. An area of interest is placed above the mentioned gap.

With a deeper look into the intra-day perspective we can see yesterday's rotational behavior. The trading scenario depends on the RTH open. We would simply lean us on the extremes with an open inside of yesterday's price range. With an open out of range we would trade into the direction of the break-out but with the probability of a pullback based on the behavior above/below the particular balance extreme. 

 

Visit our trading community to learn a more indepth analysis process with various tools such as the VWAP or Footprint chart.

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