SPY unable to break through key resistance level
SPDR S&P 500 ETF (SPY) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, SPY finished Wednesday at 274.99 gaining $0.89 (0.32%). Today's close at 274.99 marks the highest recorded closing price since December 3, 2018. Trading $0.90 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on February 6th, SPY lost -0.95% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (SPY as at Feb 13, 2019):
Wednesday's trading range has been $1.37 (0.5%), that's far below the last trading month's daily average range of $2.64. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for SPY.
Three candlestick patterns are matching today's price action, the Bearish Doji Star and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji.
Unable to break through the key technical resistance level at 275.23 (R1), the market closed below it after spiking up to 275.93 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Trading close to December's high at 280.40 we might see further upside momentum if potential buy stops at the level get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Doji Star" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for SPY. Out of 16 times, SPY closed higher 68.75% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 68.75% with an average market move of 1.24%.