Last week I said SPY, the ETF which tracks the S&P 500 Index, was at a critical juncture and the week of 8/9 would most likely determine the intermediate trend. We got a resounding answer from the market last week with SPY hitting a high of $113.18 on Monday and closing the week down at $108.31.
There is a strong level of resistance around $113.20 which I have drawn in purple. In addition, SPY closed below its 20, 50, and 200 day moving averages as well as the fibonacci retracement level of $112.31 and $109.14 (see second chart for the high/lows used to determine these retracement levels).
Looking forward, SPY is clearly in negative territory and the trend is negative. On the upside, $113.20 continues to be a strong level of resistance. If we continue to drift lower support could be found at $104.38 and then $101.10-$101.64. Failure to hold $101.10 could spell further declines.
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