Stock Market Rises As The SPY Shakes Off Apple’s Plunge: The Bull, Bear Case For The ETF

The SPDR S&P 500 ETF Trust (NYSE:SPY) was climbing about 0.4% at one point on Friday, shaking off market fear caused by reports that China may ban its public workers from using Apple’s iPhones.

Investors are optimistic the Federal Reserve may choose to hold interest rates steady when it meets next on Sept. 19 and Sept. 20, boosting a positive sentiment in the market, despite recent data showing the economy remains strong with borrowing costs at the highest level since January 2001.

From a technical analysis perspective, the market ETF shows both bullish and bearish patterns on the daily chart, with the SPY trading in a confirmed uptrend but also settling into a possible bear flag formation.

An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.

The higher highs indicate the bulls are in control while the intermittent higher lows indicate consolidation periods.

Meanwhile, a bear flag pattern is created with a steep drop lower forming the pole, which is then followed by a consolidation pattern that brings the stock higher between a channel with parallel lines or into a tightening triangle pattern.

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The SPY Chart: The SPY’s recent uptrend started on Aug. 18, when the ETF reversed course from the $433 level and subsequently printed a series of higher highs and higher lows. The most recent higher high was formed on Sept. 1 at $453.67 and the most recent confirmed higher low was printed at the $442.75 level on Thursday.

• If the uptrend is set to continue, traders want to see the SPY continue to rise next week to form another higher high. If the SPY falls lower on Monday, Friday’s high-of-day will serve as a lower high, which will negate the uptrend.
• The SPY’s possible bear flag pattern was formed between Sept. 1 and Friday, with the downward sloping pole created over the first four days of that timeframe and the flag forming since. If the SPY drops through the flag formation on higher-than-average volume, the measured move of the pattern is about 2.4%, which suggests the ETF could fall toward $436.
• The SPY has resistance above at $447.06 and at $454.05 and support below at $436.79 and at $429.80.

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