Ichimoku Watch: SPDR S&P 500 ETF Trust Engaging with Support

5월 29일

Designed to track the performance of the S&P 500 market index, the SPDR S&P 500 ETF Trust (current AUM is US$529,081.40 million) is engaging with an interesting area of support on the 4h chart after gapping lower on Wednesday. This follows an all-time high forged last week at $534.00.

SPDR Testing Support

The uptrend in this market at the moment is obvious, and traders, therefore, will be seeking locations for dip-buying opportunities.

The Ichimoku Cloud’s upper limit was tested yesterday, currently between $525 and $529 (the difference between the Leading Span A and Leading Span B), and could be enough to encourage buying. This is also the first time the Cloud has been tested since the Leading Span A crossed above the Leading Span B at the beginning of May.

Within the Cloud, there is also a 100% projection ratio at $522.00, which, for many harmonic traders, will be recognised as a potential AB=CD support level. Further to this, a trendline support (from the low of $493.86) is close to this level.

Adding to the above analysis, the Conversion Line appears poised to cross back above the Base Line, which, given the uptrend, would be observed as a bullish signal.

Price Direction Favouring Bulls

The trend in this market and the current support structure suggest that it remains a buyers’ market. Within the Ichimoku Cloud, the AB=CD support and trendline support could provide a floor to which dip-buyers may be drawn.

However, should the Conversion Line cross back above the Base Line prior to testing the above support area, we could see dip-buyers enter this market earlier to challenge all-time highs.