SPY Index Drops 1.12% (413.9) Amid Concerns of Potential US Bond Default
The three major averages experienced declines during regular trading on Tuesday. The S&P 500 recorded a loss of 1.12%, while the Nasdaq Composite and the Dow Jones Industrial Average declined by 1.26% and 0.69% respectively. Our robots have been in consolidation with a slight downward trend for the past two months, awaiting market clarity on the future medium-term direction. Patience is required in this situation. In my opinion, even in the event of a "positive" resolution to the scenario, an increase in the US government debt ceiling could potentially lead to market downturn due to the long-term risks involved.
The Stochastic Oscillator analysis indicates that the ticker has remained in the overbought zone for four consecutive days. Typically, an extended period in the overbought zone suggests an impending price pull-back.
After a three-day decline, the stock is expected to experience further downward movement. Historical data shows that in 50 out of 62 instances where SPY declined for three days, the price subsequently rose within the following month. However, the current odds of a continued downward trend are estimated at 78%.
On May 18, 2023, SPY broke above its upper Bollinger Band. This occurrence may serve as a signal that the stock is likely to retreat as it reverts back below the upper band towards the middle band. It may be prudent to consider selling the stock or exploring put options as potential strategies.
SPY's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for SPY turned positive on May 26, 2023. Looking at past instances where SPY's MACD turned positive, the stock continued to rise in of 49 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on May 25, 2023. You may want to consider a long position or call options on SPY as a result. In of 67 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in of 361 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 425 cases where SPY Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 64 cases where SPY's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SPY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
SPY broke above its upper Bollinger Band on May 18, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
