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I am an independent investor writing at Scott's Investments (http://www.scottsinvestments.com). My site is dedicated to discussing and publicly tracking historically successful investments strategies and sharing free investment resources. I emphasize empirical, historical, and quantitative... More
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  • Key Levels on SPY 0 comments
    May 15, 2010 11:50 PM | about stocks: SPA
     This week is options expiration week and as such I felt it would be beneficial to review some key levels on SPY since I have not done a study of SPY in some time (there hasn't been much to say in the past months except "It's going up").  I mentioned a couple days ago the possibility of tracking some options trades on ETFs on my blog - consider this article an insight to my current thoughts on key levels on the SPY that may influence potential option trades.  Below are two charts, the first is a 1 year daily chart which has a low point of $87 in July 2009.  The high is $122.12 reached in April.  I have drawn fibonacci retracement levels (a favorite tool of MarketClub's Adam Hewison) as well as a 50 and 200 day simple moving average.  Here are the key levels I see in the short/intermediate term:

    The market closed within pennies of the 23.8% retracement level of $113.83 - I would watch this level on Monday. The 200 day moving average is looming around $110 and could serve as a potential support level.  An additional downside target is around $104.50, which is the 50% retracement level as well as near the low on 5/6/10 (the day the market crashed for no apparent reason) of $105.   Thus, I'm watching that range of $104.50-$105.  On the upside, the 50 day simple moving average around $117.63 coincides with last weeks high of $117.68, making it a potential resistance level.


    On a longer/intermediate term basis you will see some key levels in the 3 year weekly SPY chart below.  I have done the same thing as the previous chart but added an additional fibonacci retracement level from the 2007  high to the March 2009 low as well as add the 20 and 40 week moving average.  The 20 week moving average is actually acting as a support point, .01 below Friday's close.  Thus, I am very curious to see what happens next week - will the market find support at the 20 week moving average and move above the 50 day moving average, or will we sink below both? 



    Disclosure: no position
    Stocks: SPA
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