As the USD continues to recover after grinding support a couple days ago and the Gold/Silver ratio continues to bias bullish (ref. yesterday’s pre-market update), let’s take a look at S&P 500 ETF, SPY. The negative indicators and market breadth have been weighing, but the question is whether SPY will put on a year end rally from the key support we’ve been managing.
Well, here we are. SPY is right in the support zone this morning, pre-open (the pre-market price is not per the candle, it is lower, right in the initial support zone). It is time to prove a successful test of support and seasonal rally or to break down, increasing the odds that a bear market starts sooner rather than after another rally.
Note: A breakdown from clear support would not automatically mean bear market. But it would compromise the technical situation. A bear is not confirmed until at least the March low (380) is taken out. On that point, there is a gap down there at 396, which could fill within a battered but intact bull phase.
