In order to filter out all the noise we have to look at the big picture. The big picture will be looking at a larger time frame like the Monthly Chart.  We can look back at Nov.2013 month’s closing price which is $181.00.  This price is significant within the candle because it’s the move which sets a bound for the rest of the weeks going forward. It’s the junction of the next levels. It is also the Candle where many price areas were tested within the following 3 months after.  As the Spy climbed along its “merry” way, we had a few significant tail test, near $181 but not exact. The first one came on April of 2014, then the infamous Oct. 2014 lows- all which resulted in a bounce.  The August low of 2015 was close but held firmly above the 182.40 mark.  If you look back enough in time, and you are familiar with how the market dynamics work, you could have foreseen SPY retest of $181. all before the New year.

On Jan.20th, yesterday’s low was $181.02. Bingo the retest of $181.

So the question is why the pop? Simply put:: buyers were waiting at that level for the POP also known as a “first touch”  For all the other tail test were not exact.  Above is a 15 minute chart, We will focus on the white area, (for the gray area is premarket) which shows the retest of the Blue line “Monthly 181 support”  You have your standard Candle stick reversal pattern with a Doji, then an engulfing green candlestick to follow— then the start of the flag patterns and the rest is history.

But realize it’s only a matter of time before the next retest -but perhaps the retest fails and breaks right through which will bring us to a targeted level of $174