SPDR S&P 500 ETF Trust (SPY) News and Forecast: Is it time to buy SPY?
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFER- SPY boosted by friendly Fed as taper talk thankfully limited.
- Fed to start tapering but no timeline set.
- SPY reacts positively to potentially bad news.
We have a potential tongue twister from our last bullet point above. The SPY reacted positively to potentially negative news, so is that really a positive? Well, the question is valid, and we think the answer is a positive yes. The so-called "wall of worry" we have been hearing about is starting to crumble, and the Fed took a gentle approach rather than a sledgehammer to further chip away at that bearish wall. Just to recap what has been keeping you up at night, we had Evergrande, tapering and Delta among others. Evergrande paid some interest on their bonds, which eased some fears. The Fed talked taper but did not put a timeline on it, and Delta does look to be under control with vaccines proving effective. What else do we have to worry about then? Inflation was the theme earlier in the year when 10-year yields spiked, but the Fed made a slightly surprising mention of an interest rate hike happening sooner rather than later to control inflation. This could certainly have provided fuel for bears as rising rates is generally not helpful to Nasdaq stocks in particular. As we keep on saying, uncertainty is the market's biggest fear, and now the Fed has provided some level of certainty. The reaction of markets into the close certainly sends the message that the market was happy with the Fed performance and happy that rate rises are coming – certainly an unusual statement.
SPY 15-minute chart
SPY stock forecast
The gap from Monday is not quite filled but is likely to be on the open today as European markets are well ahead. This will bring us into a neutral zone technically, although we are now bullish after yesterday's price action. Above $448 the chart turns bullish. Look for volume to increase today as inflows return and investors rebound into to some of their favourite names. The volume will confirm the bulls are back.
FXStreet View: Neutral technically but bullish based on price action, bullish above $448, neutral $443 to $448. Bearish below $433.
- SPY boosted by friendly Fed as taper talk thankfully limited.
- Fed to start tapering but no timeline set.
- SPY reacts positively to potentially bad news.
We have a potential tongue twister from our last bullet point above. The SPY reacted positively to potentially negative news, so is that really a positive? Well, the question is valid, and we think the answer is a positive yes. The so-called "wall of worry" we have been hearing about is starting to crumble, and the Fed took a gentle approach rather than a sledgehammer to further chip away at that bearish wall. Just to recap what has been keeping you up at night, we had Evergrande, tapering and Delta among others. Evergrande paid some interest on their bonds, which eased some fears. The Fed talked taper but did not put a timeline on it, and Delta does look to be under control with vaccines proving effective. What else do we have to worry about then? Inflation was the theme earlier in the year when 10-year yields spiked, but the Fed made a slightly surprising mention of an interest rate hike happening sooner rather than later to control inflation. This could certainly have provided fuel for bears as rising rates is generally not helpful to Nasdaq stocks in particular. As we keep on saying, uncertainty is the market's biggest fear, and now the Fed has provided some level of certainty. The reaction of markets into the close certainly sends the message that the market was happy with the Fed performance and happy that rate rises are coming – certainly an unusual statement.
SPY 15-minute chart
SPY stock forecast
The gap from Monday is not quite filled but is likely to be on the open today as European markets are well ahead. This will bring us into a neutral zone technically, although we are now bullish after yesterday's price action. Above $448 the chart turns bullish. Look for volume to increase today as inflows return and investors rebound into to some of their favourite names. The volume will confirm the bulls are back.
FXStreet View: Neutral technically but bullish based on price action, bullish above $448, neutral $443 to $448. Bearish below $433.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.