The Calm Before April. March SPY Chart Highlighted (SPY)

March has proven to be another paint drying, low volume churn of a month. All the markets have done this month are trade higher in a zombie like fashion. This alerts me inflation could be slowly catching hold and thus the market could be setting up for a fast break. Not sure if the break is going to be up or down, but the price action/volume is telling me the market is waiting on a catalyst.

The chart to the left is of the SPY, highlighting a month of trading in 60 min intervals. The range is very tight, starting the month at 111 and ending 6 or so points higher around 117.35 resistance. The red line is a very interesting level, there is clear selling up in the area, though we have seen decent green volume when we touch the level, just not enough to chew through all the sellers. The SPY has been at its current level five times, breaking higher for a day or so only to snap back below the line. This tells me watch this level, a clear break above will signal fresh bullisness.

A low volume break below the upward trend line at 117 will signal the market is still unsure of direction. High volume break down might signal a short term reversal back to the 1150 level by the end of next week.

If we do not sell and break above 117.50 we move to 1180 by the end of the first week of April, if the economic data keeps being spun positively 1200 will be in the cards by the beginning of June.

Posted in: Market,SPY