GET DAILY SIGNALSThe potential default is causing nervousness and weighing on the markets. The index ( $SPY, $410.25) dropped by 0.67% on Tuesday.
During Tuesday's regular trading session, investor concerns about the potential for a default led to a 1% decline in the Dow Jones Industrial Average, followed by losses of approximately 0.6% for the S&P 500 and 0.2% for the Nasdaq Composite. Our robots also did not perform well in line with the index yesterday, actively opening short positions and closing long positions. Exercise caution as there may be a continuation of nervousness and market decline.
President Biden has instructed his staff to hold daily meetings to address outstanding issues, and he canceled part of his upcoming international trip due to the negotiations, according to the White House.
Investors are anticipating the next developments in these negotiations, given the significant stakes involved and the high level of uncertainty surrounding the outcome, as stated by Sam Stovall, Chief Investment Strategist at CFRA Research.
Treasury Secretary Janet Yellen reiterated her warning that the government needs to raise the debt ceiling immediately. If not, the country could face the possibility of defaulting as early as June 1.
The Stochastic Oscillator appears to be transitioning from an upward trend to a downward trend. Historically, in 50 out of 63 cases where SPY's Stochastic Oscillator exited the overbought zone, the price continued to decline within the following month. The probability of a continued downward trend is estimated at 79%.
Additionally, the Momentum Indicator dropped below the 0 level on May 11, 2023. This may indicate a bearish signal, suggesting potential selling opportunities. In 50 out of 67 instances where the Momentum Indicator fell below 0, the stock price continued to decline within the next month. The odds of a continued downward trend are estimated at 75%.
Furthermore, after a 3-day decline, the stock is expected to continue its downward trajectory. Based on historical data, in 50 out of 62 cases where SPY experienced a 3-day decline, the price further decreased within the following month. The probability of a continued downward trend is estimated at 78%.
Given these indicators and historical patterns, it may be prudent to consider selling the stock, shorting the stock, or exploring put options on SPY as potential strategies.
Contributor
Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
SPY's Stochastic Oscillator descending into oversold zone
The Stochastic Oscillator for SPY moved into oversold territory on October 26, 2026. Be on the watch for the price uptrend or consolidation in the future. At that time, consider buying the stock or exploring call options.
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a +0.86% 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in 297 of 358 cases, the price rose further within the following month. The odds of a continued upward trend are 83%.
The Aroon Indicator entered an Uptrend today. In 350 of 419 cases where SPY Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 84%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 16, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on SPY as a result. In 61 of 78 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 78%.
The Moving Average Convergence Divergence Histogram (MACD) for SPY turned negative on October 15, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 52 similar instances when the indicator turned negative. In 37 of the 52 cases the stock turned lower in the days that followed. This puts the odds of success at 71%.
SPY moved below its 50-day moving average on October 22, 2026 date and that indicates a change from an upward trend to a downward trend.
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 50 of 62 cases within the following month. The odds of a continued downward trend are 76%.
SPY broke above its upper Bollinger Band on October 06, 2026. 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.
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