A simple progress report on SPY’s bounce. The initial rally today put SPY back above the resistance line roughly equivalent to SPX 1975, which was Resistance #1 to the bounce and a valid topping area for a relief bounce. Resistance #2 is around SPX 2040.
As you can see, SPY filled a gap (blue) from Tuesday’s big drop and is now sagging back below resistance. This bears watching, but the bounce is intact (with a ‘stop loss’ on that thinking being a weekly close below Tuesday’s low of 190.73 [B], which would put it on the ‘August Low Retest’ Express). The key on the upside to continuing the bounce is 199.84 [A].
The market could not be in a more short-term middle ground stance than it is now. The major levels are SPX 2040 (notable overhead resistance) on the upside and 1820.66 (October low) on the downside. Current resistance (and 199.84 or 190.73) will decide which comes into play next.
