SPY Hammering Resistance from June

There’s a significant resistance level from $444 to $445 going back to late June that, for the time being, is established support for SPY.

A trendline connecting the Jun 23 H, Jun 30 H, and Jul 12 L sits right around $446 at the moment.

Directly underneath we have the quarternary trendline off the Mar 13-May 4 lows. This line has only been breached once on May 24 before SPY began to build a gap above.

There is also potential resistance-turned-support from Dec 1 ‘22 to Feb 2 ‘23. This TL wasn’t respected well on the break and retest this past Jun and Jul so it’s unclear how reliable it is. But, there is something there.

Regardless, this entire area is obvious support for SPY and we’re seeing that in the violent intraday swings of this week.

This isn’t a go-long environment at the moment. But I definitely do not think it is a sell-short environment, either.

My short-term idea is that we work our way back up to the mid-$450’s possibly as soon as today into next week. I think this action is likely to be sloppy. But I don’t think we tank from here; we’re still near 52-week highs and there are plenty of buyers out there still optimistic SPY has more room to run.

With that said, I’m willing to open new long positions as long as SPY holds at least down to $443.50. We may need one more flush of the sellers before buyers become more engaged; it would seem so on this week’s action.