The popular averages soared upward on Friday. The yield of 10-year US treasury bonds held above that for 2-year notes, hence concerns were relaxed about a recession possibly looming on the horizon.
During May both the 50 and 200-day moving averages of the SPY were punctured. Then the early June rally pushed the SPY back above both of them. This blossomed into a full fledged resumption of the uptrend leading to all-time intraday and closing highs for the SPY on July 26, as hopes grew for a Fed easing and an armistice in the trade war. We got the easing, but the trade war is still ongoing.
Then a SPY sell-off began and accelerated into a gap on August 5th, but the 200-day MA was not violated. That pointed toward a possible filling of the gap. Not only was it filled on August 8th, but also the SPY pushed above its 50-day moving average.
On Friday August 9th there appeared to be risk-off selling during the closing minutes that continued on Monday. The Tuesday SPY rally found resistance at its 50-day MA. Then on Wednesday the SPY tumbled precipitously. On Thursday the price gyrations were somewhat more quiet. That led into a relief rally on Friday. Now the SPY sits between its 50 and 200-day moving averages. Crossing one or the other could be telling for the trend into the autumn.
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DISCLAIMER: Our commentaries are provided as general information and not investment recommendations. You are responsible for your own investment decisions. Our opinions are based on historical research and data believed to be reliable. There is no guarantee that results will be profitable. We are not responsible for errors or omissions. We may hold positions in vehicles that are mentioned.
