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John Mylant
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Residing in Colorado Springs, Colorado. Has been trading and coaching using a self-developed option trading system for 10 years. Philosophically conservative, accurately trades weekly options with a strong risk management approach. Well sought after by investors around the world, he teaches a... More
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SPY Technical Analysis
  • ETF SPY: Caution Please We Could See Huge Swings 0 comments
    Nov 25, 2012 10:10 AM | about stocks: SPY

    Technically Speaking

    RSI- the RSI has continued to follow the movement of the SPY. The recent move up was expected after the stock hit an oversold level. A rebounded was expected. The recent move up is stronger than the last, but the real resistance level may be the 50 day MA this is what I am waiting to see.

    Bollinger Bands- the push through the middle band just means that the middle band will not be used for resistance. If this is true the move down may not be as strong as it could have been. This is the third peak in this downward movement. Now, will the SPY move down again back to the lower band?

    MACD- like the RSI, the MACD signaled a strong downward movement. But the recent move up was so fierce that we are experiencing a MACD MA crossover. We also are experiencing the first move above the '0' marker for the MACD histogram.

    Current Events

    President Barack Obama and U.S. congressional leaders are expected to discuss ways to reduce the budget deficit and avoid the "fiscal cliff" of automatic tax increases and spending cuts in 2013 that could tip the economy into recession. As politicians make their case, markets could react with wild swings.

    Many in the market agree there will be some sort of agreement that will fuel a rally, but the road there will be full of political landmines as Democrats and Republicans dig in on positions defended during the recent election. Liberals want tax increases on the wealthiest Americans while protecting progressive advances in healthcare, while conservatives make a case for deep cuts in programs for the poor and a widening of the tax base to raise revenues without lifting tax rates.

    On a brighter note for markets, Greece's finance minister said the International Monetary Fund has relaxed its debt-cutting target for Greece and a gap of only $13 billion remains to be filled for a vital aid installment to be paid.

    Still, a deal has not been struck, and Greece is increasingly frustrated at its lenders, still squabbling over a deal to unlock fresh aid even though Athens has pushed through unpopular austerity cuts.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: SPY
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