$438 to $410 in 9 days! What's next for SPY?

A look at volume profile

SPY’s Volume Profile for week ending Oct 27

I don’t use volume profile daily, but I do use it when significant moves happen. Let’s take a quick look at SPY’s volume profile.

Volume profile helps identify large zones of volume and just as important zones with less volume.

See the volume gap between 409 and 396. If we break 409 this coming week, we could see 396 within 2 weeks. I was looking for one more back test of 425 or 418 before hitting 409 but we are here. I’ll be hawking on pops or on a close under 409 to reopen a short swing targeting 395. Ideally 410 holds and we get that 418+ bounce to reload short.

We nailed each pop for short swing entries, and the dump has come much faster than I expected. Overall things are more or less playing out like I thought it would back in June or July when I started warning of choppy range moves ahead and I expected 400 to come again within next 3-6 months.

In the week ahead I would like to see a relief bounce before more down side, but lets see.

Key Events This Week

AAPL Earnings — a negative reaction, could weigh SPY down

Powell Speech — J Pow will be speaking again this week. Will the market rally or get crushed?

How to make money in this market?

Be sure to learn how to trade the levels I provide each day. The market has been respecting those levels so well and you can plan some amazing trades using it.

I mentioned Friday morning how 412-415 was range and look for range break.

When I first got started, I thought of levels as hard numbers that a stock should not move above or below…. Instead of focusing on the level and the specific number learn to read the price action at the level. How is the price action reacting to the level….

That will go a long way to helping you become a better trader.

That’s it for now. Have a great weekend. I’m getting on a plane back to PR.