According to recent analysis, panic levels in the 405 to 410 SPY range were reached, indicating more fuel for the market to rally as more panic is present in a region. Panic has been observed when the TRIN closes above 1.20 and tick closes below -200. Fibonacci levels on the chart up from the March low indicated that the current sideways move is in the middle point of the upswing, with the largest retracement near the 38.2% level, implying a target near 445 SPY range, which is up by 6%.
Additional price highs near the 415 range also suggested substantial support. There was also a “Sign of Strength” through the 415 SPY level confirming a breakout of that level. The uptrend appears to be uninterrupted as the SPY tested that level on low volume, suggesting support.
Recent charts from last Thursday indicated that the middle window is the 2-period moving average of the VVIX/VIX ratio, which is also useful in spotting negative divergence near highs in the S&P 500. When the VVIX/VIX ratio makes a lower high while S&P 500 makes a higher high, negative divergence is present. Opposite to this is positive divergence, which is present when the ratio makes higher highs and S&P 500 moves sideways. This could suggest that the VVIX/VIX ratio leads the way to higher highs in the S&P 500.
The expected volume for the market is likely to drop as Friday approaches due to the Memorial Day weekend, making the validity lower but showing no signs of any worthwhile high.
- Monitoring purposes; Long S&P 500 on 2/6/23 at 4110.98
- Monitoring purposes GOLD: Long GDX (NYSE:) on 10/9/20 at 40.78.
- Long Term S&P 500 monitor purposes; Neutral
