For the last 3 week U.S. equities have traded in a historically extreme narrow trading range; heading into today’s session the S&P 500 had spent the last 13 trading sessions trapped within a .74% trading range. Today the tightest trading range in more than 20 years is resolving to the downside:
SPY (Daily)
Notice how implied volatility (VIX at bottom of chart) began to turn upward a couple days before today’s downside breakdown in the S&P. If the breakdown holds or accelerates to the downside into the close the minimum initial downside target is the rising 50-day simple moving average which happens to coincide with previous resistance near $211.
In the Trading Lab at CEO.CA we highlighted a setup in SDS (UltraShort S&P 500 ETF) earlier in the trading session. To follow our trade updates and market analysis in real time you can subscribe to CEO Technician Premium using the PayPal button below:
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher ofEnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.comfor important risk disclosures. It’s your money and your responsibility.