The SPDR S&P 500 SPY was surging over 1% higher on Wednesday after President Joe Biden said lawmakers will reach an agreement before the U.S. defaults on its debt, which could occur as soon as June 1.
The news caused the SPY to break up from a triangle pattern as it reached the apex of the formation, which Benzinga pointed out on the S&P 500 Monday.
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The SPY Chart: The break up from the pattern caused the SPY to confirm a new uptrend is intact, with the most recent higher low formed on Tuesday at $410.24 and the most recent confirmed higher high printed at the $414.54 mark on May 10. On Wedndesday, the SPY was working to print a bullish Marubozu candlestick, which could indicate higher prices will come again on Thursday.
- The second most likely scenario is that the market ETF forms an inside bar to consolidate Wednesday’s bullish price action. If that happens, it will lean bullish for continuation in the direction of the current trend.
- Bearish traders may want to wait for the SPY to eventually form a bearish reversal candlestick, such as a doji or shooting star candlestick, which could indicate the local top has occurred and a retracement is on the horizon. If the SPY rises to the $418.31 mark, it could find resistance there like it did on Feb. 2 and May 1.
- The SPY has resistance above at $420.76 and $426.56 and support below at $414.89 and $408.
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