7/8/20 Life in the Rectangle

SPY Weekly

SPY poked above the top of the three week rectangle but pulled back to the top yesterday. It is still in a larger 7 week long rectangle going back to the week of May 26. The range looks like 322 – 295.

This is essentially the same range of the body of nasty candle of the week of February 24; Open 320 Close 293. That range will be broken in one direction or another at some point, but there is no special reason that it will happen quickly.

xCF appears when xFF runs out of a little steam but price stays above both moving averages. It is not typically a bad place to be long. This has happened 197 times in the last 4.5 years. It is the most common FF5 signal.

The signal has happened 16 times in the 67 trade days since the start of April. Note that the standard deviations are higher than the 4.5 year numbers. Performance has been mixed, but the technical characteristics are decent, especially for TQQQ and LABU – compare CH with CL, CH is greater than the absolute value of CL.

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