A Powerful Setup In The Making
What a tremendous amount of movement we’ve seen over the past 5 trading days.
From down nearly -6% in two trading sessions, to recovering it all back in the next 3 days– and this is the S&P500 we’re talking about, not some small cap tech company.
Have a look at the weekly chart of the SPY ETF about an hour before the close on Thursday.
The week isn’t over yet, we have one more trading day to get through before this bar completes, but lets recap the sequence of events this week.
- A break below significant 203.50 support
- Continued flush below SPY 200 shaking out all tactical longs and bringing in aggressive shorts
- A sudden and sharp (v-shape) recovery back above 200 and then 203.50 support
- Continuation higher to the top end of the range, right below multi-month highs
- A heavy volume week above average (it will be by close of day Friday)
- Here is the icing on the cake which hasn’t happened, but has potential: An outside week with the potential to engulf the prior weeks bar
The bold part is what is really exciting, and what has the potential to make this a very powerful setup in the making.
Engulfing, wide ranged, emotional bar, right under multi-year highs, it doesn’t get any better than that.
Learn what new trades we are putting on at the end of this week to take advantage of these recent events and the environment moving forward by joining our trading membership.
Enjoy what you read? Share it below and be sure to tag @thetraderisk.