Macro Structure on $SPY

I think we’re making something about like this on $SPY:


I have looked at these before (on smaller time scales, and each of them produced rallies), but it’s pretty amazing to see one developing now on such an enormous scale.

Obviously, we don’t want to see this fall apart, but I don’t think it will. I can’t rule out slightly lower lows (50-60 points at most?) as wedges can “underthrow” but this may also be complete now.

What makes a structure like this bullish is the contraction in price. In other words, after months and months of mostly selling, where each selloff becomes more violent in its velocity (“steeper”), the bears are accomplishing less and less and less each time (hence the contraction). So, if this holds, it has terrific potential as the target for a structure like this is up there at the two April highs.

So, the dollar has excellent (sharp) bearish divergence on the daily, as do yields. Let’s see if this can get some legs now. If this is the structure that is in play, once we get going we should scarcely look back again for a bit.

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