$SPY Holding Support, But $650–$600 Gap Looms Large
$SPDR S&P 500 ETF Trust(SPY)$ 📈
While the $Invesco QQQ(QQQ)$ bear cycle turned quickly, $S&P 500(.SPX)$ has been slower to roll over. That said, Monthly BX currently has a high probability of closing red for March.
We have been expecting a 5% to 10% correction for a while, and unfortunately price action is lining up with that view.
In the short term, SPY is sitting on a strong liquidity level, so a relief rally is very possible. However, when MBX is red, most rallies tend to turn into continuation sell offs.
There is also a major volume gap from roughly $650 down to $600. If this liquidity zone is swept or broken and price holds below, I would expect any sell off to be fast and violent as price moves through that gap.
As always, I am not shorting. I am staying objective. This would likely add more drawdown to the fund and that is fine.
My plan is the same: keep rotating into sectors and names showing relative strength and keep following the rules of the system no matter what happens.
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