SPY unable to break through key resistance level
SPDR S&P 500 ETF (SPY) Technical Analysis Report for Jul 02, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, SPY ended Thursday at 312.23 gaining $1.71 (0.55%) on low volume ahead of tomorrow's Independence Day OBS market holiday. Trading $1.46 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on June 23rd, SPY lost -2.55% on the following trading day.
Daily Candlestick Chart (SPY as at Jul 02, 2020):
Thursday's trading range has been $4.19 (1.33%), that's below the last trading month's daily average range of $6.01. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SPY.
Unable to break through the key technical resistance level at 314.38 (R1), the ETF closed below it after spiking up to 315.70 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for SPY. Out of 359 times, SPY closed higher 57.10% 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 65.18% with an average market move of 0.58%.