SPY Technical Analysis & Stock Market Update


Chart done on hourly candles. The bulk of notable earnings were announced last week as Amazon and Apple reported their numbers, but the most impactful event was Fitch’s downgrade on American’s long term debt rating. The downgrade from AAA to AA+ is the first of its kind since 2011, and it shook markets up, sending major indexes 19% lower. Last week’s reaction was indeed bearish, and the combination of Apple’s third quarter of revenue decline didn’t help confidence. On a brighter note, Amazon reported better than expected earnings on high targets, pushing the stock by 10% at one point last week.

This week’s focus shifts to earnings from Disney, UPS, AliBaba, and other notable names. Now that technology stocks have mostly reported earnings and most came in line, overall markets aren’t likely to have major reactions to the companies remaining. Investors/traders are also preparing for July’s CPI and PPI reports to get the latest reading on inflation along with the quarterly Household Debt and Credit Report, and the Consumer Sentiment Index. 

Technical Analysis: 

SPY amongst other indexes all closed red and broke their short term bullish trend. Friday’s daily candle formed a bearish engulfing, making it the second of its kind in just a matter of one week. Both engulfing patterns were combined with strong selling volume so our short term outlook is to the downside. The first support area in focus is between 442.00-445.00 which if reached will fill a gap from July 11th, 2023. Below that point bearish activity is likely to increase and take SPY down to 436.00-437.00. In retain the bullish trend, buyers need to regain a level above the 453.00 mark.