SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. Market volatility continued last week as traders and investors decide which direction to take next. Friday was especially notable for SPY because it recorded the largest volume seen since 6/16/2023, which was a bearish day followed by a full week of downside movement. The Market Volatility Index (VIX) also saw a sharp move up on Friday, likely due to the upcoming Fed’s meeting. The Federal Reserve will be holding its FOMC Policy Meeting on Tuesday and Wednesday to give an update on monetary policy and interest rates. Interest rate decisions are typically based on economic healthy and inflation, but although multiple inflation reports came in higher than expected this month, the probabilities for a rate hike this week are only 2%. The market expects a 98% chance that The Fed will hold rates steady until at least November (CEM Group). At this point it’s impossible to say how markets will react to The Fed’s decision, so it’s best to await results before taking any action.

Technical analysis:

We’ve already mentioned SPY’s unusually high volume on Friday, but more importantly, equipped with that high volume came a break below the 10/20 day MA lines, which have acted as a key support for traders in recent trading action. The next available supports below the moving averages are the price point supports at 442.70 and 440.90, a break below those points has a downside price target of 437.60-438.00. Buyers on the other hand need a move back above 448.50 to regain control and potentially take SPY to the 451.00 price target.