S&P, Rebound ?

Before The Open

Price Action Penetrates Support

Yesterday’s action in SPY, closed lower but not before bouncing off the top of the ‘Neckline’ as shown below:

We should also note, during that session, action penetrated the support level established on September 20th.

It’s a completely natural market behavior to ‘spring’ off penetration(s). Today’s pre-market session is doing just that.

The reason is, once support is penetrated, it sets off a flurry of orders; sell, sell short, and buy … along with the associated stops.

It’s a busy area in the market. Those orders need to be sorted out.

That’s where we are now. However, a couple items to note.

One:

Since September 23rd, in the regular session, SPY has posted seven consecutive lower highs.

Two:

As shown below, if price action opens (or gets no higher) than 430.60 – 430.70, or so, that action is trading right at a Fibonacci 23.6%, retrace from the September 23rd high, to yesterday’s low:

Currently, with about 25-minutes to go before the open, SPY is right around 430.44 – 430.45.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

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