Good afternoon folks!

I hope everyone has had a great week so far.

I just wanted to dive into what the market was presenting us and what to watch for as the week comes to a close.

But first, congratulations to my 2-Day Trader subscribers who were able to get the 104% profit on the APPS calls yesterday!

Alright, let’s dive into the market.

Looking at the SPY daily chart, we see that the market is indecisive on whether to invalidate the bear flag or fall back into the bear flag.

I sent out an email to you all on Monday stating the bearish nature of other indices, IWM and DIA mentioning if those names struggle it would decide the next direction of the market.

And after two days, IWM is setting up something very interesting. I’ll get to that in just a moment.

Here’s the SPY weekly chart and what to watch for.

I have been mentioning to the 2-Day Trader subscribers in our weekly market commentary that the 2020 COVID low trend line would need to be tested before additional selling would occur.

On Friday, we tested this trend line and it is proving to be a battleground in the market.

The bulls were able to invalidate the bear flag on the weekly but I cautioned subscribers to watch for a false breakout.

As of now, bulls are struggling to gain traction in this zone and it is starting to set up a bearish look until proven otherwise.

Let’s check back in on IWM.

This is the most bearish chart of all the indices at the moment.

A double top rejection right at trend line resistance. Yesterday, IWM closed with a spinning top candlestick and today was confirmation.

Spinning Tops simply show indecisiveness within the market.

Today’s gap down was the confirmation candle.

My trend lines aren’t present on the previous IWM screenshot, but a bear flag is present there as well.

So, what does all this add up to?

As I’m sure you could tell, the overall market is bearish to my eyes until proven otherwise.

Of course, the market is quick and can invalidate set ups quickly. You must stay nimble in this game.

I will be watching the SPY weekly chart for either a rejection off of the COVID 2022 trend line or a push higher through the trend line to determine my overall directional bias for next week.

SPY closed today with an inside day.

So for the absolute short term, a break and daily close below yesterday’s low would leave me bearish for Friday or a break and close over yesterday’s high would leave me neutral/bullish in the absolute short term.

If the latter were to happen, bulls would have a lot of resistance to fight through in the short term.

If you have any questions or comments, please feel free to email me at [email protected].

Also, I may do a free live webinar on Friday for a quick Q&A and market commentary session for next week. If you’re interested, please send me an email!

Enjoy your night and spend time with your friends and family. The charts will always be there.

–Dylan

(Head Analyst)