SPY – How important was yesterday?
Yesterday (Feb 4, 2020) was a technically significant day for the S&P500 – a breakout day after some time in which the market showed signs of building a downtrend (which is a part of a natural market price action).
You may see in the chart that since the definition of a downtrend is lower lows and lower highs we have been confirming that definition until yesterday, then a breakout candle broke through and invalidated the downtrend, at least for the short term.
The significance of yesterday is in the fact that price action managed to break the downtrend to the upside, after touching the 320 level as indicated by Fibonacci and our forecast models (see our previous forecast).
We usually provide clear forecast for the rest of the week, only in this case our models are sitting quietly on this decision point, we may see the return of the downtrend but in case the market forms an uptrend in the coming days, we will declare the correction as over and increase our risk, as our modeled strategies suggest.