SPY stalls after 5-day surge

After a five day surge from 110 to 113, the S&P 500 ETF (SPY) took a breather on Tuesday with a small decline. SPY was trading in positive territory in the afternoon, but got hit with a late sell-off that pushed prices into negative territory. A small bearish engulfing pattern formed and the ETF is short-term overbought after its five day run. Even though these conditions could give way to a short-term pullback, there is nothing to suggest a medium-term trend reversal at this stage. Chart support at 107 is based on the consolidation lows and the August trendline.

There is no real change on the 30-minute chart. Broken resistance around 111-111.5 turns into the first support zone to watch on a pullback. As noted above, SPY is short-term overbought and we could see a throw back to broken resistance. The next commentary will be on Monday, January 4th. Happy New Year!