Lower highs, lower lows.
Final week of the Q3 competition.
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Lower highs, lower lows - that seems to be the price action right now. Every rally fails to clear the previous top (e.g. yesterday’s Trump announcement on war negotiations), and now we are below the 200-daily MA and hitting the 650 support on SPY.
Momentum continues to weaken across timeframes, with both daily and 4-hour MACD trending lower.
The key question now is whether 650 holds, or if this opens the door to further downside.
Charts: continuation after breakdown
The move below 670 has now played out. We have broken the 200-day MA on SPY, and are sitting since Friday on a very strong 650 support thus far (see daily chart below).
But the structure has clearly weakened over the past couple of weeks. We are getting the classic lower lows, lower highs, which is a standard bearish sign.
Even Trump’s announcement on opening negotiations with Iran sent the markets only so far (about 2% midday before reversing half of those gains). It shows you that the market is weak and that it’s gonna take more than a few tweets to get us back to the uptrend.
Also, note that we are still not oversold on the RSI on the daily. More room left to go.
On the 4-hour chart, the pressure is more obvious. Price continues to form lower highs and lower lows, with each bounce failing quickly. There is no real follow-through on the upside, just brief relief before sellers step back in.
MACD remains below zero and continues to trend lower, with the histogram printing consecutive negative bars. Momentum is still aligned with the downside.
If price attempts to bounce, 650 is now the level to watch from below.
And remember what confirmation looks like. You want to see a move down, a bounce back toward resistance, and then another rejection. If that sequence develops around 650, this can accelerate quickly.
If price somehow reclaims 650 and holds above it, then this becomes a failed breakdown. But right now, there is no evidence of that.
The competition
With markets breaking lower and testing support, positioning this week becomes more important. How this move develops could start to create clearer separation across the board.
Stay focused and keep climbing the ranks!
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