SPY At Top End of Trading Range
By
Luke Miller
The SPDR S&P 500 (SPY) continues to struggle in the upper 330s with support below at 335, 332, and 328. Below 328 most likely sees the 310s.
The Bayesian Timing System (BTS) still indicates we are in a trading range between the 310s and 330s for several more weeks, and we presently find ourselves near the top end of this range now.
As this swing position has been viewed as a hedge by the BTS for longer-term long positions, a material break of all-time highs would put this signal in jeopardy, as that run to the mid-340s may be underway now.
Here are few micro-paths: (1) [Probability=77%] SPY turns down in the upper 330s and heads back down to 328-332, with targets at 315-320 below that if 328 is sustainably breached, and 2) [P=23%] SPY sustainably breaks above the 330s now and heads to the mid-340s now (separate from the down to 320 and then back up to the mid-340s, as discussed herein.
Intermediate-term the BTS sees a wide trading range for the next several weeks in the 310s-330s at the swing trading level and then one more high into the 345-350 range in the intermediate timeframe and then a bear market of 20% to possibly much worse on the multi-month horizon.
Only if and when 350 is cleared does that more bullish potential begin to surface targeting 400 or higher in the next several years.
In metals, the Gold Miners ETF (GDX) remains in the 28s, as there is minimal progress one way or the other. The BTS is still expecting an upwards breakout: Given the signal is long, we expect a break higher to at least the 29.50-30 resistance band versus a breakdown below 28ish by 70% to 30%.
Upside targets still remain at 31 on this path.
Regarding the SPDR Gold Shares (GLD), at the intermediate level there is a target near 153-155.
