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Market Technical Analysis – Sep 04 2020

SPY went down 338.24 and reached 334.87. We played some puts and made 50 percent and more over there. Right now we are playing SPY Calls. Where is SPY heading? Lets look at the chart

SPY had an ascent from 335.82 to 358.75 which is 90 degree Gann Angle. We have been mentioning that markets are all time high with Stochastics on the weekly chart all time high. SPY gave up the whole move upwards and went back up straight below 335.82 to 334.87 which is again a 90 degree Gann angle move. One thing interesting in this move is that in this descent, SPY did not touch the conversion (334.71)and MA 10 (330.30) on the weekly chart. This indicates that there is one more wave down to get to 330.30 and beyond.

Volatility has shot up and it around 33.29. if you look at ATR , which is a measure of volatility, has gone up to 4.97 on the daily chart from 2.70 area.

SPY furiously came back after getting to 334.87. SPY Crossed the base line and almost touched the conversion line on the daily chart. One thing interesting here is SPY is still bullish as per Gann Fan ( above the 45 Degree line) on the weekly chart and as per ichimoku ( Conversion over base, Price over ichimoku cloud and lagging span above the price 26 plots behind) on the daily chart. However , on the other hand, SPY definitely formed a lower lows on 2 continuous days.

So, the question is, where is SPY heading?

I feel that SPY will rise and cross over the conversion briefly to 352 and then begins its descent down to the moving Average 20 (blue line) around 329 area on the daily chart which is coinciding with MA 10 ( brick color) on the weekly chart. Then , we will begin our march to 368.

Sep 04 Daily Chart

Sep 04 Weekly Chart

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