SPY Small Price Channel Set-Up

SPY Price Channel in Rising Megaphone at Top of Larger Price Channel

SPY Price Channel in Rising Megaphone at Top of Larger Price Channel

Yesterday I posted a likely rising megaphone topping pattern (orange on chart above) on a year-long SPY price channel.

Today I wanted to show you a smaller price channel (orange) along the bottom of that orange rising megaphone.

SPY broke the top of that little price channel on June 2nd in the channel’s critical decision wave, where the price decides whether to break out into a melt-up or start a top.  SPY then put in a nice partial pullback into the channel.

Today SPY is poking through the channel top again.  This is where the melt-up set-up (green scenario) lives or dies.

SPY has to either get going screaming higher–and pronto–or it’s electing to form a channel top (purple or blue scenario).  The blue scenario should have been connected to the first purple wave down, not the second.  SPY could also form a rising megaphone or rising wedge for the little channel top.

Whatever little top the channel forms, it should also in the end work out to a head and shoulders top on the orange rising megaphone.

 

5 Comments (To enlarge images, right click on image & then click "view image") → SPY Small Price Channel Set-Up

  1. AdecsRay

    Moe: Still looking for the XIV ‘reset’. Potential similar occasion was on 11/30/16 with a decline in the ES of 1.6% before a strong reversal on 12/5/16. We have a very similar setup regarding advance/decline patterns now. Not making any predictions, just watching to see if the a/d process supports this scenario. Thanks.

    Reply
    1. AdecsRay

      Also- if the ‘reset’ scenario does play out, it may well take longer time-wise than that on 11/30/16 as the current a/d pattern though very similar in shape and amplitude is approximately a 38% longer structure between it’s start/end control points.

      Reply
  2. AdecsRay

    Hi Moe: Thought it time to post a possibility on what the setup looks like on the smaller chart advance/decline process patterns. Historically, we see a rarer set-up that may suggest a ‘reset’ for XIV since it’s acceleration up has stalled for a few weeks now. Expecting the current move down to complete with a reversal to recommence XIV upward acceleration. That should coincide with the market moving with it if this is an XIV reset situation. Thanks for great posts on everything.

    Reply

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