SPY: Critical Double Support Area! (D&W charts analysis)Looking at the daily chart of SPY, we observe a clear retracement from the double top pattern formed at the all-time high (ATH) level around $565.16. The price has now pulled back to test the 38.2% Fibonacci retracement level, currently acting as a support zone at around $543.91. This level will be crucial in determining whether the price will bounce or continue to retrace further towards the 50% and 61.8% Fibonacci levels near $536 and $529, respectively.
On the weekly chart, the double top at the all-time high has triggered a downward reaction, and price action is showing a rejection of higher levels. The 21-week EMA, which provided strong support in previous pullbacks, is being tested as the price sits close to this level. This EMA coincides with teh 38.2% retracement on theh daily chart, suggesting a strong double-support area. If the EMA holds, we could see a recovery attempt, but failure to hold the 21-week EMA may open the door for a deeper correction towards the $510.27 support level, if the retracements fail to hold SPY's price on the daily chart.
In summary, SPY is in a critical zone with the potential for a bounce from the 38.2% Fibonacci level on the daily chart, while the weekly chart shows a need for support from the 21-week EMA to avoid further downside.
For more detailed technical analyses and insights like this, be sure to follow my account. Your support helps me continue providing valuable content to help you make informed trading decisions.
Remember, real trading is reactive, not predictive, so let's stay focused on the key points described above and only trade when there is confirmation.
“To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.” — Jesse Lauriston Livermore
All the best,
Nathan.
