SPY/ES - Analysis - Oct 21, 2021 - ATH Reclaimed

2021年10月21日

ES1!SPY



End of Day - Oct 21 - Analysis

What happened: ES/SPY has basically reclaimed its ATH (4549.50) with a close at 4541.75 (Oct 21).

Analysis:

• Volume analysis indicates we have declining volume with a rising trend. However, the actual candle bodies have also been decreasing. Therefore, the move is likely acceptable without major anomalies. There are hints of weakness with an equivalent lower wick from today - but again, nothing major or confirmatory.
  
• Market earnings have been strong and supports the current move, most notably with TSLA. We are still dealing with inflationary pressures, the beginning of global supply chain issues, and the ever-looming Evergrande fallout.
  
• CNN Fear and Greed index is 69 (Greed), which is a vast change from 39 (Fear) a week ago. This suggests a rather quick change in sentiment.
  
• We are currently sitting in a strong 1d supply zone (4518-4549.50). This zone is formed from the daily chart and comes after a long uptrend (rally-drop-rally). The next major zone below is a 1d demand zone at 4285-4348.
  
• RSI on the daily chart is hovering around 70 on an uptrend. We are currently in a "bear support zone" and would hold off on adding to a long position. I would take profits/tighten stop-losses and watch carefully for the RSI to hit 80-90 for a full exit on a long position.
  

Bear Thesis:

• If this supply zone is as strong as we think, expect a short-term BEAR sentiment. Unfortunately, as we mentioned, the next major demand zone is all the way down to 4348.
  
• A full reversal back to 4348 is a little hopeful, so we will use volume profile and fib retracements for PT in a bear position.
  
• PT1: 4459 (0.62 fib level)
  
• PT2: 4437.50 (nice little volume island and recent POC)
  
• PT3: 4404.25 (0.38 fib level)
  
• Final PT: 4285-4348 (1d demand zone)
  
• SL: 4560.50 (arbitrary round number slightly outside of our 1d supply zone and small buffer of 0.50)
  

Bull/Neutral Thesis:

• As we are in a strong supply zone, bull thesis is weaker. However, with strong earnings supporting this move and seemingly the world is still OK despite the aforementioned issues we could still go up vs stay in consolidation/range-bound.
  
• I would like to see volume enter to break and maintain the supply zone. But volume has been trending down. With so much money flowing around anything can happen. As they say, markets can stay irrational longer than you can stay solvent.
  
• PT1: 4604 (0.23 fib extension level)
  
• Other PTs: Based on fib extension levels as we are in unchartered territories and based on volume price analysis (VPA).
  
• SL: 4507 (chosen slight outside of today's lower wick)
  

TLDR: ES/SPY is either going up or down, and always to the right. Be safe.

2021年10月23日

交易進行

Oct 22 Close - ES/SPY showing an increased volume with a harami with quite upper and lower wicks. This is suggestive of a change in the trend however confirmation is required. Overall, the above thesis is still in play.