Home > Market Set Up > $SPY starting to show signs of profit taking

$SPY starting to show signs of profit taking

Tracking which side of the market to trade from the last few months has been as simple as watching the daily and hourly charts. We have had text book heavy volume rallies and light volume pauses withing that momentum. This week has brought a different picture to the party.

Yesterday (9/17) we saw a heavy volume sell day in the $SPY, otherwise known as distribution. It takes a few more of these to be significant and potential leading to a reversal of order flow but a good trader must be on top of all clues.

The next sign we would look for before we start initiating any confident short sales would be a break below the hourly support levels with some significant volume. We are currently trading below the hourly on the SPY but volume will be a little light because of the Jewish holiday. If we close near the lows today I expect Monday to bring some pretty heavy selling. If it does occur my target on the $SPY is the $104 area.

heavy volume distribution day on $SPY daily

heavy volume distribution day on $SPY daily

$SPY breaks below the hourly support

$SPY breaks below the hourly support

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