The SPY is back at the 200-week average, where it has continued to find resistance. That said, if it can break out above this level then the scenario we pointed out last week which has the market launching a multi week rally would then seem to be the most likely probability.
In addition to the 200-week average, the SPY is faced with its 50-day average just overhead. Today’s volume was weak today so we are looking for a bit of backing and filling in this area. There’s no denying, however, that the set up looks very bullish here. At a minimum we expect a breakout. Whether the breakout is for real or fails is a whole other question entirely.
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