$SPY

There are 4 cycles of price action-
-Accumulation (sideways)
-Public participation (uptrend)
-Distribution (sideways)
-Public participation (downtrend)

The $SPY is in an accumulation stage.

Price can exit the accumulation stage once a majority of supply is absorbed.
We will know when this happens because institutions will run a "Test of Supply"…
I believe this is what we're seeing right now.

If August candle closes properly, I believe $540 is coming.

What if the market does not "pass" the Test of Supply?
If volume & price show signs of active sell pressure once again…
Then, the bear market will resume.
Institutions would need to flush out the remaining sellers and re-try the test again at a later date, likely months down the road.

I think price could see low $320’s if price fails this test and institutions begin another shake-out.

Let’s move onto the weekly chart and what to anticipate this week.

The week before last was a bullish anomaly, but it closed below support…
This week is the same thing.
Smaller candle body than the initial sell candle, but much higher volume.
This signals a presence of buyers, and seller exhaustion.
However, just like the previous week, price was unable to hold support…

While volume is screaming that the market wants to move up, price is still giving me a “risk-off” signal below support.
Price could easily continue dropping if this level is not reclaimed, especially considering downside momentum now picking up.

Unusual Options Flow
$675M Bullish Inflows
$267M Bearish Inflows

New notable bearish order came in before the close last Friday.

Conclusion-
This monthly candle is extremely important.
Until it closes, I’m pretty unbiased, seeing potential for either direction.

The weekly candle tells me to expect more downside next week if price cannot reclaim support.
But it also tells me that if price reclaims support, lose the bear bias fast.

Volume continues to scream bulls are coming, but until price can respect some levels and get over support, can’t force it.

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