SPY closes above its opening price after recovering from early selling pressure
SPDR S&P 500 ETF (SPY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SPY ended the month 5.89% higher at 326.52 after gaining $2.56 (0.79%) today. Trading up to $4.57 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. 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 Jul 31, 2020):
Friday's trading range has been $5.30 (1.63%), that's above the last trading month's daily average range of $4.22. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SPY.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading down to 321.33 earlier during the day, the ETF bounced off the key technical support level at 322.71 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on July 14th, SPY gained 0.92% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for SPY. Out of 399 times, SPY closed higher 62.66% 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 68.42% with an average market move of 0.71%.