SPY: Week of Nov 20th for AMEX:SPY by Steversteves

All in all, it seems that we are likely pulling back this week, probably a move before moving higher.

This is based on:

Position of SPY on the Z-Score (Standard Deviation Assessment).

Position of SPY in relation to the 75 and 50 DSL line on the 1 hour and daily.

Position of SPY in relation to VIX, DXY and QQQ when co-integrated.

Position of SPY in relation to the ARIMA moving average on the daily.

The weekly momentum probabilities.

Next week positioning on the S&P via SPX options.

Option positioning on the VIX for next week.

Overhead resistance from our ATH that prevents us from hitting the weekly forecasted high targets (you can view this in the main chart, but here is a bigger picture look at that resistance):

The weekly regression probabilities (a neutral approach to prob modeling) are actually net neutral on all S&P derivatives, they are 50 / 50 but the momentum ones are particularly bearish.

I suspect it will just be a pullback though before going higher if we do indeed sell.

And if we look at SPY co-integrated with DXY, VIX and QQQ, we are the most overvalued we have ever been:

This was the last time we were this outside of the expected range and what happened:

As well as SPY’s position over the ARIMA moving average (this indicator is to be released soon, just still working on some stuff with it):

Again, more over-extended than we have ever been, with an initial pullback target at 440 to 439.

So yeah, lots going on, lots to consider. But it seems like it’s going to be a short, at least temporarily. As of now, this puts the immediate target at around 440 to 439.

And as a general note:

I have also fixed the issue with TPs not getting hit on the indices.

I have increased the precision of the stuff I used. Prior to 2022, I used high-precision calculated levels, however in 2022 there was crazy volatility and the high-precision levels were not always great and easily skewed by huge moves in one direction, which was happening on a daily basis.

So I switched to a low precision model which did the trick and has done the trick for most part of this year, however, I have noticed that we have returned to more stable trading behaviour, for the most part, this year, and the low preceision models have been kind of hit or miss.

For example, if you followed along with my QQQ drama on Friday, here is QQQ with the low-precision model overlaid:

No targets hit. But look what happens when we increase the precision:

PH2 reached……

So yeah, will probably try these next week, though I have a feeling the volatility may be a bit more present than we saw last week… but that is just a hunch.

Anyway, will catch up with you later, safe trades and enjoy the rest of your weekend :-).