SPY Price Channel Fails To Elect Breakout

Published 03/03/2016, 11:59 PM
Updated 07/09/2023, 06:31 AM
SPY
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SPY Price Chart

The Blue SPY (NYSE:SPY) price channel failed to elect a breakout into a melt-up and is about to be maxed out on the upside.

SPY has been creeping up a price channel all week (blue on chart above). The channel failed to break out upwards into a melt-up in its critical decision wave.

That means it’s either in the middle of a topping formation (like the head of a head and shoulders–green scenario) or it’s about to return to the channel low before heading up to start a topping formation (purple scenario).

The blue channel is twining up the top of a megaphone that began forming February 17. That makes SPY a strong favorite to return all the way to the megaphone bottom at roughly 1850.

SPY would then put in a retrace to the megaphone VWAP at roughly 191.75 for the critical decision on breakout direction.

SPDR S&P 500 Chart

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