SPY Projections

27. Feb. 2022

Analysis done on hourly candles. It's the first weekend since the official invasion has started in Ukraine and investors are on the edge of their seats as they watch the events unfold. Markets learned about Russia's plan to invade months ago and they've been brought down to correction territory because of it, which proposes the question: is the official invasion already priced in? The line "buy the rumor, sell the event" may be applicable in this case since markets already prepared themselves for the worst possible outcome leading to it, this could be the reason we saw a massive buy on Thursday and Friday after the official invasion begun. This is known as "buy the invasion" on the stock market. This doesn't guarantee we'll be bullish from here, but it should be noted in your trading approach that not all news will create the market reactions that you expect. Looking at the overall markets in the last few months, we see that many names that needed serious valuation corrections have successfully been brought down to reasonable prices, which is a good sign for the health of the markets. Of course as many of these companies came down, they brought down major indexes and ETFs like SPY with them, which is a ticker that experts use to gauge overall market health. In the last two months on SPY we saw the index decline to 420.00, bounce, then back again to 410.00 last week only to bounce even higher with stronger volume. This suggests that buyers were quick to jump in on the lows after we broke support, which could indicate a bullish reversal. Going into this week our first focus is for SPY to maintain the blue highlighted range of trading. If we can do that and break above the 440.00 mark then we could potentially move to 448.00-450.00 next, which will bring up most names on the market, especially tech.