$SPY - Time for a Bounce

2022年6月22日

Giving last week's update which I didn't realize was private:
Last week was by far one of my best weeks this year trading in the stock market this year, and it's due to a variety of factors: the DP prints, option flow, macro/news, and technicals. I've been preaching the incoming downward movement regardless if SPY or other equities like AMD (downward trend completed -- see prior TradingView analysis on AMD).

- We had huge option order flow occur all week.
- The consolidation we were seeing with respect to the supply and demand zone on SPY.
- Testimonies and global events that were creating more room for concern.
- Dark pool activity not only in SPY but all across tech especially.

Put all that together -- the put flow, the dp data, macro/news and technicals and you'll get the best risk to reward that you can play with, which means more money in the market. You may have to wait to find the right set up, but considering multiple variables is the most consistent way to trade and if you want to be a trader that's what you got to end up doing at the end of the day.

The data all together worked out pretty well as we saw a huge waterfall and more sell off after CPI data was released. I took my profits last Friday as this week could still remain pivotal.

So what happens this week? My expectation is we fall a little more, however, I don't expect us to make a new low of the year.. at least not by a significant margin. A variety of scenarios could play out, if we fall further on Monday, I expect us to get into a range between prior supports (approx) 385-387. We may also possibly get a bounce from a sell-off on Monday going into Tuesday and from there we could see a possible gap fill this week if not later. Then after the gap fill, we could see another bearish retreat. I want to talk about the put flow all of last week. Super super bearish . I shared the deep SPY action last Monday which allowed those folks to cash in on the amazing waterfall we experienced on Friday. The thing is most of these large orders is they have shown to be valid especially during corrective stages. Nevertheless, always be careful especially with how volatile the markets have been. Keep in mind the technicals and flow to give you a sense of where the market can go in the near-term time period.


Now:
We definitely made a run for it and enough to come up to a short term demand zone . The FEDs job technically right now is to halt consumer spending. Spread fear and have people stop buying to combat inflation . That’s not necessarily good for companies selling. And rate hikes will hurt companies who need to borrow and are in debt especially with limited free cash flow.

The recession drama is far from over and there is still great possibilities of downside in the market. Personally, I think we will continue to see worse inflation for this month. We have just started to see the first lowered guidance from companies across the board for the first time in a long time that there's no reason to see a pick up into next quarter.

The stock market and how the economy is going aren’t always moving together so even if the general expectation is to see more downside, I believe we're due for a bounce up in the near-term.

Showing a larger picture of my past forecast/history with SPY. Enjoy!