Anticipating the Sell-Off in SPY
by Mike Paulenoff
August 20, 2023 • 10:24 PM EDT
A week ago Friday, August 10, with SPY (SPDR S&P 500 ETF) trading at 446.05, Mike Paulenoff posted a chart commentary to MPTrader members indicating that his technical setup work on SPY was at a critical pattern inflection point.
Mike wrote:
"Based on today's action, I have come to the conclusion that the "orthodox low" of the decline from the 7/27 high (459.55)... ended at Tuesday's (8/08) low (445.27), and that an intervening counter-trend rally ended at today's (8/10) high (451.70), which leads me to conclude that a new downleg (has) STARTED ... Only a rally above 451.70 will invalidate its downtrend pattern that projects to 442.00-442.80 and thereafter, down to 437.00-437.40... Last in SPY is 446.05..."
During the subsequent 6 sessions into last Friday's August Option Expiration (8/18/23), SPY followed Mike's anticipated resumption of dominant downtrend weakness, slicing beneath his optimal target zone of 437.00-437.40 (see the SPY chart below), hitting an intraday low at 433.01, down 3% from Mike's August 10 alert.
Now that SPY has declined nearly 6% from its multi-month rally high from the October 2022 low to the July 2023 high, what's next? Is the correction over ahead of a period of strength, or still vulnerable to downside continuation? What will Mike's detailed pattern and momentum work indicate about the direction of SPY ahead of Friday's Jackson Hole speech from Fed Chairman Jay Powell? Most importantly, however, how will Mike's work aid our members in managing their expectations and gauging risk next week?
Login this week to join Mike and MPTrader members for their opportunistic intraday discussions about pattern development and the fundamental and macro factors that could prove consequential for SPY, as well as for many individual stocks, indices, sector ETFs, Commodities, FX, and Bitcoin.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
markets, plus key ETF component stocks in sectors like technology, mining, and banking.
Sign up for a Free 7-day Trial!
More Top Calls From Mike
ARKK (ARK Innovation Fund, ETF)-- Back on August 20, 2025, this is what we discussed about ARKK:Fellow member Pawel has requested an update on Cathie Wood's fund, which in June thrust up and out of a 3-1/2 year base-accumulation period and pattern above 68.40/50 that subsequently climbed to my initial target in the vicinity of 80 (see my attached Daily Chart). Since the 7/21/25 high at 79.
On July 31, 2025, with SLV (Silver ETF) trading at 33.27, this is what we discussed about my technical setup:SLV-- On the subject of tariffs, copper, and silver, Trump extended the tariff deal with Mexico for 90 days, which included steel and copper, but NO MENTION of Silver (so far). Let's notice on my attached 4-Hour chart of SLV that the week-long nosedive from 35.91 to this AM's low at 33.
On February 18, 2025, this is what I posted on MPTrader about KWEB (Chinese Internet ETF) that alerted traders to a potentially explosive setup that should keep KWEB on our radar screens going forward :My attached Daily Chart shows that KWEB is attempting to emerge from a huge, three-year rounded base-accumulation setup that projects much higher prices as the price structure climbs the "recovery wall of worry" in the aftermath of the relentless bear phase from the February 2021 ATH at 104.
On July 29, 2025, this is what we discussed about TEVA (Teva Pharma), accompanied by my then-current 4-Hour Chart, just ahead of Earnings:My attached 4-Hour Chart setup argues that TEVA is poised for upside continuation of its April-May advance (12.47 to 18.67) EITHER right from current levels in reaction to a positive Earnings Report tomorrow morning, OR into a BTD bout of weakness into the 14.85-15.55 target support window.
On the morning of August 6th, I posted the chart below after seeing Fundstrat's Tom Lee discuss his CEO position in BMNR (BitMine Immersion Technologies), and the fact that BMNR was accumulating a large cache of Ethereum (ETH) that will serve as an ETH Treasury holding similar to the Bitcoin model used by Microstrategy's Michael Saylor. At the time, BNMR had climbed from 31.85 to 33.70, which piqued my attention technically:"BNMR ... once again is putting upward pressure on the 34.