The SPY stock (NYSEARCA:SPY) has been in a slump since failing to reclaim the 200-day simple moving average on Aug. 16.
The Federal Reserve hiked its main interest rate by 0.75% on Wednesday, the third time in four months, in another effort to slow rising inflation. However, the ETF rose slightly in the premarket on Thursday. The short-term benchmark rate rose to its highest level since 2008, ranging from 3% to 3.25%.
The Fed’s goal is to cool the economy by making mortgages, auto loans, and business loans more expensive, forcing people to spend less. Fed members see interest rates peaking between 4.5% and 5% in 2023, indicating that the central bank intends to maintain its aggressive policy, which risks sending the economy into a recession.
Rising interest rates may have a detrimental impact on profit margins in the stock market. This might result in unfavorable price movement in individual stocks and market ETFs as traders and investors anticipate corporations to develop at a slower rate and perhaps miss earnings projections.
A stronger bounce is anticipated until investors see more evidence that the Fed’s strategy is working and inflation is declining for many months in a row. On the SPY chart, technical traders will be looking for signs that the bear cycle is coming to an end.
The SPY Chart: Market Analysis of SPY Stock
On August 16, the SPY reverted into its most recent downturn after failing to retake the 200-day simple moving average as support. The most recent lower high was recorded on Wednesday at $389.31, while the most recent verified lower low was created on September 6 at $388.42.
The SPY stock (NYSEARCA:SPY) fell to its lowest level since July 14 on Wednesday, but it has yet to indicate that the next lower bottom has happened. Eventually, the ETF will print a bullish reversal candlestick, indicating that a bounce, or at least another lower high, is on the horizon.
The SPY stock (NYSEARCA:SPY)produced a bearish engulfing candlestick on Wednesday, indicating that lower prices are possible on Thursday. The ETF will most likely print an inside bar batter and begin to consolidate the steep decline. The SPY is facing resistance above $380.61 and $385.85, as well as support below $371.48 and near the 52-week low of $362.17.
Featured Image- Megapixl @ Sbotas
Author Okoro Chinedu 
