SPY began the week with a significant drop from the 287’s down to the low-284’s before the opening bell. Despite that drop, however, volatility quickly returned to reasonable levels and encouraged traders to buy. SPY climbed through the morning, adding about $1.50 before lunch and then slid downward on profit-taking into the afternoon and closed just slightly higher.
Tuesday began with an odd pattern developing: after a healthy pre-market climb, SPY bounced within a narrow band of support and resistance for over an hour before finally breaking upward toward 287. The buyers eventually came to the party and sent SPY upward to end the day on a positive note.
Traders seemed content with stability on Wednesday and did not care to send SPY in either direction. SPY traded in a narrower range than seen in much of that past few weeks but maintained its integrity at the current price level by not breaking through support. The pivot and S1 lines showed their worth, bounding much of today’s activity.
Thursday was a decidedly downward day. After a significant drop in the pre-market trading, SPY found a level of support, which briefly held as the opening bell rang. Further downward movement resulted through the morning as traders feared that the US and China are becoming entrenched in their positions and the realization that the dispute will soon begin to affect the US economy.
Friday brought continued concern over the trade war with China. This, in addition to traders’ desire to close positions ahead of the long weekend sent SPY downward early on in the day. It eventually found support near 282.20 and quickly rebounded upward and closed the day off near 283. Although it was an overall losing week, SPY demonstrated confidence by maintaining strong levels of support amid a pessimistic market sentiment.