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Assessment: It’s been a while since I had an update, but there’s been very little to update. The move from 600 to 618 in SPY was slow and didn’t really provide a quality trade for the risk/reward potential. Combine that with the overbought nature of this market at and above 600, it really wasn’t a good trade setup but a forced one. Not only is the Path Predictor table showing OVERBOUGHT and the calculations pointing to shorting, but RSI has now popped above 70 in recent days.
Beyond the technicals, barring big news, it’s unlikely to see much action over the summer. We have 4th of July on Friday so many traders take off this week leading in and/or the week afterward. Long story short, there’s just not much to do in the summers. When you look 5 to 10 years ago, there tended to be good points for trading in the summers. In the last 5 years its seemed more like the big traders and funds got together and said… “Remember how much fun it was to have summers off in school?!?! Let’s all agree not to do any material trading in the summer and we will come back in September and get back to work? We can jet off to Europe, go to the islands, enjoy the sun and our beach houses with family and no concern for the markets. Deal?!?” To which they all agreed and that’s why summer in the market is like watching the slow waves from the ocean. You get some up and down movement, but from June through late August, there’s not much of quality to trade…up or down.
I will keep an eye out to see what we get, but I don’t expect much for another 1.5 to 2 months.
SPY Chart: https://sblk.io/s/6rLrFRu7CbUwPS3a
Good luck in your trades!