9.29.2022 Market Update
We are sad to report that the almost 2% pop to the upside experienced by the S&P 500 on September 28th was primarily traders who were covering their short positions. Large moves up, follow by a large decline like today, are very common in bear markets and a typically cause by short covering.
The good news, for now, is that SPY (our favorite S&P 500 ETF) has remained in balance the past 5 days (shown by the two horizontal orange lines in the chart below). The not so good news is that SPY appears to be respecting a downward channel shown in blue on the chart below.
We currently remain neutral while SPY remains in balance and with the end of the month/quarter tomorrow. Our upside target continues to be that gap fill low from September 22nd at 373.44. Our downside target remains October 2020's high of 354.02.
Feel free to leave questions in the comments below or on twitter.
Happy Trading!
Photo by Elena Mozhvilo on Unsplash