SPMO Price Analysis (Breakaway Gap?)

SPMO (S&P Momentum stocks) Price Analysis (Breakaway Gap?)

- Monday’s gap up with the weekend Iran news, marked as # 2 in the picture below, failed to prove itself as a Breakaway gap that would trap the bears. Today’s candle broke below yesterday’s candle low.

- Compare this to a true breakaway gap from the 3/30 bottom, shown as #1 below, the 2nd day candle trapped all the bears and did not revisit a penny back into the gap space. When this happens, the bears below the gap (trap) level are short to close their shorts and squeeze SPMO and SPY higher, this is not what happened today, instead SPMO dropped near 3% and SOXX took it on the chin. Shorts got paid today. The bulls waiting for a Thrust Reaction like square #1 from the 3/30 gap were disappointed.

- Tomorrow, we need to see if this price action continues to constitute an Island Reversal level / an exhaustion gap, and that the $760 remains the top on SPY

Note RSP (equal weight S&P) full closed the gap today 100% of it, more bearish price action. QQQ/SPY some of it.

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