Chart courtesy of StockCharts.com
- $SPY officially entered correction territory dropping over 10% from all time highs to the lows on Friday.
- $SPY price is under all key moving averages even the 250 day SMA.
- $VIX continues to remain high at 24.16 and went higher Friday over the Thursday high. The market currently has elevated fear and uncertainty as indexes go into corrections and many growth and tech stocks drop over 20%.
- Price has closed under the 10 day EMA since October 4th. The 10 day EMA is currently acting as end of day resistance.
- The current downtrend has been on higher volume than the previous uptrend showing distribution. Many days are double the average volume of the uptrend.
- The MACD remains under the bearish cross under since the last price top in the $SPY.
- The trading range continues to expand higher to a 4.62 ATR. Giving day traders room to work but creating extreme volatility and danger of quick losses if caught on the wrong side.
- The RSI closed above the oversold level ending at 30.34 Friday. But this drop in the stock market has not held the 30 RSI and only resulting in short term oversold bounces of a day or two before new lower prices.
- The 200 day SMA and 250 day SMA are key dividing lines between bull and bear markets and backtests well as end of day buy and sell signals in $SPY.
- This is the type of market that is best to stay defensive, trade smaller, and wait for only the best signals before going long.