$SPY Outlook 05/30 - 06/02

With a tentative agreement to raise the debt ceiling reached over the weekend, we now look to see how the markets react when it is voted on later this week.

Technical Analysis: The megaphone pattern we’ve been watching all month is still in play. We also have the macro uptrend line that we have not tested since March.

My general lean for this week is bullish. Bulls will want SPY to hold above last week’s open at 418.64. Barring any additional news, I’m expecting us to fill the gap above to 420.77 - 421.22 when markets open on Tuesday. I do see a 15 minute Fair Value Gap around last week’s open at 418.64 where we could potentially form a support base before we head higher into the 423-425 range.

Although I can see the market moving higher in the short term, I’d expect some corrective action in the coming weeks.

Bear case if we fail to hold the 418.64 level, we could potentially retrace to the 0.618 fib at 414.04. Should we invalidate a golden pocket bounce, our next support zone would be the daily gap under the 50 SMA from 409.87- 407.27.

Under this… megaphone plays out and we test the macro support trendline.

Upside Targets: 420.77 → 421.22 → 421.97 → 422.82 → 423.54 Extended: 425.26

Downside Targets: 418.64 → 417.30 → 416.25 → 414.94 → 414.15 Extended: 408.87