Scenarios For The SPY - 9/13/2015

Last week, the SP500 ETF, SPY failed to move above the recent pivot high at 199.84. It opened near that level on Wednesday and was rejected immediately and ended the session with a 1.39% loss or -27.37 points. For the remainder of the week, it simply fluctuated within a narrow range between the 194.85 and 196.90 levels.

Next week is the September FOMC meeting. The market is anxiously waiting for the FED’s decision on possible rate hike. Whatever the FED’s decision on the rate hike will be, the market is bound to resolve the recent indecision and make a move either toward the recent high or toward the recent low.

Here are three possible scenarios for the coming week for the SP500 ETF, SPY. One possible scenario (scenario 1) is for the SP500 to go down and test the level near 193.72 (1) before it swings back up to the December 16, 2014 close at 197.91 (2) and moves toward the 199.84 level again. After it has successfully move above the pivot high at 199.84 (3), it then proceed toward the resistance level at 204.40.

Scenario 1




Another scenario (scenario 2) is it could continue to move up from where it ended last week and it breaks through the 199.84 (3) level and rally back above the 204.40 until it encounters resistance near the 207.95 level.

Scenario 2




The third scenario (scenario 3) is it fails to move beyond the December 16, 2014 close at 197.91 (2) and reversed to fill the gap near 193.72 (1) and headed down to retest the October 2014 close and possibly retest the recent low near 181.92 for support.

Scenario 3




The above scenarios are not predictions. They are just possibilities on what the market might do. As always, the market will do what it wants to do. One should always plan for the unexpected!