ARCA:SPY rallied yesterday after it looked like the Easter bunny was dropping a nice egg on the market. This rally off the low came from both support of a price level and a trend line. More importantly broke out of its triangle pattern. Since the March lows SPY has been trending upwards and this trend line provided support yesterday- this also formed the bottom of the triangle. The top of the triangle was the descending trends since its top at 211.11. The market was able to rally near the bottom of the triangle and near the price support area of 205 – 204.12 which has been support over the last month. It would appear that SPY is looking to rally, but did hit a snag at its resistance at 208.18. This level has stopped the rally after a big day and bulls need this level to break to test those highs again. A break of this level would also confirm the triangle break to the upside.
The markets won’t rally till this level breaks, but on the flip side the market won’t sell off till 204 breaks. So we remain in this range till one breaks.
