SPY week 06.12.2023-06.16.2023:
Chart done on hourly timeframe. The S&P 500 reached a fresh new 2023 high last week and entered bull market territory. Stocks across different sectors moved higher, but last week in particular we saw small cap companies in the Russell 2000 Index begin their push. Most of the recent rally has been attributed to the move in a few large cap tech stocks, which alone can’t sustain a bull market, so seeing capital flowing into other sectors and industries is a good sign. Traders enjoyed a week of little to no critical economic data, which also helped the market rally, but this week is loaded with key reports and meetings. Fresh inflation numbers are expected this week from the CPI and PPI reports, and The Fed is holding their FOMC Meeting where they’ll make their interest rate decision. Uncertainty brings volatility so this week we can expect a rise in market volatility. Not only are traders awaiting The Fed and inflation reports, it is also a triple witching week, which comes around four times a year. Triple witching is a date when quarterly market index futures, market index options, and stock options all expire the same date, which will be this Friday. The fears around triple witching days comes from the infamous Black Monday crash of 1987, which was preceded by a triple witching Friday.
Technical analysis:
SPY mostly traded in the same range last week until Friday when it finally broke above the 430.00 resistance and reached a high of 432.00 before pulling back, making that level the first resistance in focus going into this week. Above 432.00 we have price target at 434.00 and 436.00. Critical support is 425.75, below that point we can see a decline to 424.00 and 420.00-421.00.