November 20th. SPY Update ...
As you may recall, on the past three Friday's we discussed "The SPY squeeze".

     In the first update, we mentioned that : "the SPY's bottom support was rising toward the gap's resistance line."   We mentioned it was a "squeeze" because the distance between the resistance and support was becoming a smaller and smaller as every day went by.   In other words, resistance and support were converging on each other.

Here we are three weeks later and the SPY moved up and barely made it past the gap's 109.68 resistance.  Yesterday, showed a sharp drop that briefly took the SPY below the 109.68 support.   Things improved late in the day and the SPY managed to close slightly above the gap at 109.82.

But, if you had the chance to read last Friday's update, you had an expectation that there could be trouble at this level.

Why?   Because we have been pointing out that our C-RSI (relative strength) has been getting weaker and weaker as the SPY has had the appearance of getting stronger by moving higher.  Last week, we commented:  "The disparity between the SPY's price trending and the Strength's trending is continuing to increase.    Unless this pattern changes soon, the SPY will fall due to "not enough strength" to keep it up at the levels it now enjoys."  The quote still stands, as the disparity remains the same.

*** Feel free to share this page with others by using the "Send this Page to a Friend" link below.

_______________________________________________

_____________________________________