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The long-term trend - descending triangle:
There are many different angles to look at when looking at the SPY right now. For starters, if you look at The Long-Term Trend you can see a Very Large Descending Triangle forming. A breakout on either side could be the start of an extensive 118-point move. 118 points is the potential "measured move" using the bottom of the Descending Triangle to the top. 479.98-362.08 = 117.9. The closer target for this measured move would be about 100 points. Using 460, the second major level from the top of the bearish trend line subtracted by the bottom around 360. Or using the 480 level, the highest point on the triangle minus the major support at 380.
The puts our long-term upper targets at 462-480 and our long-term lower targets at 244-262. This is just one potential scenario that could play out for the longer-term trend. We could very easily bounce around in this descending triangle for a few more months. We could even have a few false break outs on either side. This is currently how the Long-Term Trend is looking. If you look at the chart, you can see that the 200DSMA and the 362 support are squeezing the Index into a tight range. The longer this squeeze lasts, the more explosive the move in the SPY can be when it truly breaks.
Long Term Major Levels to Watch: The Down Trendline, The 200 Day Simple Moving Average (SMA), The 200 Week SMA, 362 and 348.11.
The Medium-term trend - Nicolas darvas box:
The Medium-Term Trend is actually forming a large Nicolas Darvas Box/ Congestion Area. It has had two fake outs of this range where it quickly rebounded back into this price range highlighted with the red and green circles.
The SPY has been Consolidating in this range from 362.17 to 415.92 for the majority of the last 8 months. In these 8 months, it has only closed decisively below or above this range on 15 Trading Days.
Medium-Term Major Levels to Watch: 429.65, 407.81, 200DSMA, 390, 378.69, 370.19, 362.17, 357.04 and 348.11.
The Short-term trend - Descending Triangle:
Currently, we have a major down trendline leading us down with the 200DSMA as well for The Short-Term Trend.
Short-Term Major Levels to Watch: The Down Trendline, The 200DSMA, 390, 378.69, 371.68 and 363.23.
Potential Short-term trend - Symmetrical Triangle:
Potential Symmetrical Triangle is currently forming in the short-term. Either of the trendlines in green and blue could be the bottoms. If either of these lines continue to hold as support, we could continue in this triangle. Alternatively, once we break them both, we can continue down to the 370 area, moving back into the medium term and longer-term trend areas.
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