SPY: Dead Cat Bounce? D&W Charts.

٧ أغسطس

After reaching a critical turning point, the SPY seems to be trying to react, and we see a decent recovery.

In previous studies, we successfully identified the top signal on the weekly chart, the featured Bearish Engulfing, which culminated in a sharp drop to the support point at $510. The link to our latest public study here on TradingView is below this post.

Now, we see that the price has left some gaps on the daily chart, and the first of them was closed yesterday, which makes it an Exhaustion Gap, one of the four types of gap.

In theory, the SPY should recover in the medium term, but we don't yet see a reversal chart structure suggesting a change in sentiment. For now, SPY is still making downward tops and bottoms, and is still below the 21-day EMA, so we need to stay alert, as it is still a bear trend, despite the short/mid-term bullish outlook.

I'll keep you updated.

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All the best,
Nathan.