On this week’s episode of Sector Highlight, I mentioned the chart of SPY, as it’s approaching an essential assist space between 420-425. The up to date model of this chart is printed above and, as you may see, the market is getting nearer and nearer to this essential assist space. A break decrease will almost certainly set off an acceleration decrease. I’m conservatively watching 420 because the set off. However breaking 424, the October low, will already be a good warning shot.
The truth that a transparent downtrend has already been established above this stage solely provides to the power of the transfer. Decrease highs and decrease lows are clearly in place, so dipping beneath 420 will solely ignite a brand new leg in an already current downtrend.
I’m not within the camp of people that see a H&S reversal formation on this chart. However, the downward threat is substantial. I’m watching assist ranges round 400 and 390 initially.
–Julius
Julius de Kempenaer
Senior Technical Analyst, StockCharts.com
Creator, Relative Rotation Graphs
Founder, RRG Analysis
Host of: Sector Highlight
Please discover my handles for social media channels underneath the Bio beneath.
Suggestions, feedback or questions are welcome at Juliusdk@stockcharts.com. I can not promise to answer every message, however I’ll definitely learn them and, the place fairly doable, use the suggestions and feedback or reply questions.
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RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered logos of RRG Analysis.
Julius de Kempenaer is the creator of Relative Rotation Graphs™. This distinctive methodology to visualise relative power inside a universe of securities was first launched on Bloomberg skilled companies terminals in January of 2011 and was launched on StockCharts.com in July of 2014.
After graduating from the Dutch Royal Navy Academy, Julius served within the Dutch Air Pressure in a number of officer ranks. He retired from the army as a captain in 1990 to enter the monetary business as a portfolio supervisor for Fairness & Regulation (now a part of AXA Funding Managers).
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