Robert Knight wrote this analysis of the SPY (SPDR S&P 500 trust) on Sunday, February 28, 2021. The next day, the markets were up 2.5%. The analysis was part of his Stocks to Watch report, published on the members-only section of the TurboTrading.biz stock market education website.
SPY: Thursday was a huge negative day with an engulfing bearish bar on big volume. Friday was also down another .68% on an even bigger volume. The SPY is on very key support here; 50-day m.a., lateral support, and the rising channel line. If the momentum accelerates here and it continues to the downside, we could see a quick move to 3750 and 3700. If this market trades much below 3750, I may change my stance to the bearish side of the market and start to short stocks. But for now, it is just a correction and the market remains in a strong rising channel. A bull market does not end with rates rising at the long end. Bull markets end with a tightening by the Fed. Chairman Powell continues to say that the Fed will be accommodative with rates staying near zero for the next few years. Also, expect another $2 trillion is stimulus by mid-March and multiple new vaccine rollouts. Respect the stops on the swings but stay the course. It has not changed directions yet.
About the Author: Bob Knight is the Founder and President of TurboTrading.biz, a community for trader education. As TurboTrading’s Day Trader Chat Moderator, he draws on his 30+ years of experience in the markets. Bob’s trading and corporate experience, and Master of Business Administration (MBA), give him deep insight into how markets function and how traders think. Bob is the author of countless SEC documents prepared for public companies. Therefore, he can guide TurboTrading members through trading documents and garner essential information quickly and easily.