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