SPY: Week of March 18

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Tricky week ahead with FOMC.
So I decided to post both the ARIMA plot and the generic forecasting plot that I use.

ARIMA has us staying below the wedge breakdown that we did on Friday:



The 80% confidence level on ARIMA (meaning 80% of closes are likely to fall below that level) is straddling that wedge.
To break back over the wedge we would need to go into the 95% range (i.e. we would need to go into the range and stay in the range where there is a 95% probability we are closing below).

This is to say, its not looking promising for a wedge reclaim. But I don't think anyone will be happy right away. I suspect we will range and chop until FOMC and then from there, we will maybe see some more movement, but then rangy again.

At this point, the direction seems down. Its going to be very difficult for SPY to hold a 95% range when buyers are peacing out.

If we look at the cumulative buyers vs sellers, we just did a bearish cross on Friday where sellers have now crossover over (surpassed) buyers:



There is a heikin ashi bearish setup I can see on the 2 hour chart which signals a fall sub 508.36.

Personally, I would put money on PL1 as the immediate target for next week. But obviously not advice!

Those are my thoughts for now, but will update if I think/see anything else!

Enjoy the rest of your weekend everyone!

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ملاحظة

SPY sure showed me, little effer.


Anyway we have a weekly GT on SPY that we are almost arrived at. I am long on it but will get out after that target is removed.

FOMC will set the tone I suppose.

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So SPY finally took out the weekly high prob target today, with an EOD rally.

As we are rallying into FOMC, we may end up not really moving on FOMC. We know what is happening, the feds have been transparent so nothing will be a shock.

While I would love to see this tank and am really pleased with NVDA's recent tumble and the fact it keeps getting smacked down, my inclination is upside. We keep breaking over this wedge into the 95 percentile range.
Buying volume is upticking again.
I am not really sure anymore what is driving this bull craze since we have removed all bullish high probs on all timeframes but its still very much alive and well.

I had to go back and reference my Spy 2024 post to see the ARIMA levels for the year. I will paste them below:

What these results mean are:
80% Confidence that the true high of SPY next year will fall BELOW 591.
95% Confidence that the true high of SPY next year will fall BELOW 633.
80% Confidence that the true low of SPY next year will fall ABOVE 433.
95% confidence that the true low of SPY next year will fall ABOVE 391.

So still a lot of upside room technically speaking, for SPY to go. Its not really "over-extended" until we approach 591. I'm not sure if we will make it that far this year.
Trending the 1 year (Jan to now) on ARIMA it has us at around the 550 mark in 100 days (essentially EOY ish). But this is extremely biased because I am only including the uptrend since Jan and not the entire history.
Including the entire history gives us the range of 591 to a low of 433 (The results above) at the 80% level.


Not until the feds come out and start hiking rates again do we have a fighting chance of coming down. And even then this market has just ignored any bad news or negative fundamental catalyst. We may just keep going until it implodes on itself (deja vu 1920s).

All of this is to say, brace for more upside imo.

I will continue to update. The immediate target range are the monthly high levels:



They are 520 and 525.

Going into next month we will have new 3 month levels! (Can you believe we are 3 months into the year? Actually feels like it has been longer haha).

Anyway, these are my thoughts. Throwing a lot at you in this update, I just want to solidfy that I really don't understand the continued ATH's of greed, but they are a pressing and relevant consideration in planning your trades!

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I just want to add, ARIMA levels have been solid this week (See the main ARIMA chart above).
ARIMA permits us to snag the 520 monthly high this week but not the 525. That would probably come next week.

One thing I noticed with the ETFs is that they have resumed 2021 behavior (which is how I am trading this current year as a repeat of 2021). This means that we won't generally see over-exaggerated moves as a rule (i.e. moves that exceed the ARIMA forecast). Only exceptional catalysts will cause this and I don't forsee FOMC being an exceptional catalyst.

Just a little FYI!