THIS WEEK For the week ahead, the 209.00 – 210.07 region (convergence of ascending 1/3 speed line with descending channel top) can absorb selling through the balance of the year, above which a secondary longterm buy signal remains in effect, expecting upward continuation over the next 3-5 months into the lower 230.00’s. Upside this week, 217.98 – 218.57 can absorb weekly buying pressures, with a weekly settlement Friday above 218.57 indicating 222.12 next week, the targeted 230.24- 31.89 region within 5-8 weeks. Downside this week, a daily settlement below 209.00 (especially early in the week) allows 204.71 by Friday’s close, while closing the week itself below 209.00 indicates a good 2016 high, 174.24 then becoming a 3-5 week target able to contain selling through November. Overall, closing the week below 209.00 allows 3-5 months bearish continuation into the 183.66 region.
NEXT 3-5 WEEKS The 209.00 – 210.07 area can absorb selling through the balance of the year, above which 230.24-231.89 remains a 3- 5 month target (pg 2). Upside, 230.24- 231.89 should contain buying through November, while a weekly settlement above 231.89 indicates longer-term resistance at 242.82 within 2-3 more months (pg 2). Downside, a weekly settlement Friday below 209.00 indicates a good annual high, 197.24 then considered a 3-5 week target able to contain selling through November.
THE NEXT 2-3 MONTHS AND BEYOND The 209.00-210.07 region should absorb selling through the balance of the year, above which a secondary long-term buy signals remains in effect, expecting 231.89 within 3-5 months, an ascending long-term channel top currently at 242.82 over the next 8-12 months (top page 2) where the SPY can top out through 2017. Downside, a weekly settlement back below 209.00 would scream “failed long-term buy signal”, essentially a valid sell signal over the next 3-5 weeks into the 197.24 region where the market should bottom out through November. Nonetheless, by closing the week below 209.00 the SPY opens itself up to testing 183.66 within 3-5 months.
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