SPY closes within prior day's range after lackluster session
SPDR S&P 500 ETF (SPY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
SPY ended the week 1.63% higher at 337.60 after gaining $0.54 (0.16%) today ahead of tomorrow's Presidents' Day market holiday. Today's close at 337.60 marks the highest recorded closing price ever. Trading up to $1.31 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on February 6th, SPY actually lost -0.53% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SPY as at Feb 14, 2020):
Friday's trading range has been $1.52 (0.45%), that's below the last trading month's daily average range of $2.74. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SPY. Prices continued to consolidate within a tight trading range between 335.56 and 338.12 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
Prices are trading close to the key technical resistance level at 338.12 (R1). The market ran into sellers again today around 337.72 for the third trading day in a row after having found sellers at 338.12 in the prior session and at 337.65 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 338.12 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 335.56 where further sell stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Spinning Top" stand out. Its common bullish interpretation has been confirmed for SPY. Out of 229 times, SPY closed higher 55.90% 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 69.00% with an average market move of 0.62%.