I sold my personal $SPY position on Thursday at the end of day. I did this because for the trend to have continued on the daily chart it had to start building another price base or go parabolic to $175 or $180 if it did not continue up then the odds were that it would retrace to the 5 day ema that is was very extended from. After the red bar Thursday the odds were that I would get a better entry than $173 if I wanted back in, this is what played out Friday with a retracement to the 5 day ema the very next day.
I have posted both the adjusted and unadjusted chart due to $SPY going post dividend Friday. There was a lot of confusion about the dividend being part of the losses Friday, that is not true, we opened $172.33 after the dividend payout was adjusted into the price then fell another .70% after that.
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We are still in a healthy bull market.
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The risk/reward in the $SPY is not as favorable for long positions as it was back at the 100 day and $166 price level. Bulls need some price consolidation and a new catalyst.
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$173 was the level where buyers where overwhelmed with sellers, $SPY spent very little time at those price levels, this is the new area of resistance.
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Friday was only the 2nd time that $SPY made a lower high and lower low from the day before in 14 straight trading days.
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For those that use RSI price was rejected at the 70 overbought reading. The RSI has worked this year in the $SPY.
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The 5 day ema held as support on Friday.
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Most of the post FOMC Wednesday run never happened now since it was cancelled out Friday with the retracement.
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With no catalyst coming for the market it will be very difficult to give buyers a reason to climb back to the $173 price level next week.
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The odds are that we are range bound here for awhile, next week will be about discovering that range.
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The next level of support is at the $169.50 level at the 10 day sma.
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Market leaders like $FB and $TSLA charts still look outstanding and did not care about the $SPY sell off Friday.
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We may be back to a stock pickers market for awhile as $SPY settles back into range bound mode and we see where we go from the 5 day ema. The path of least resistance now appears to be down.
