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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: Bullish Momentum With Good Economic Numbers 0 comments
    Jan 26, 2013 10:08 AM | about stocks: SPY

    Technically Speaking

    RSI: The RSI has been bullish since early November and recently just reached the over bought level at 75.40 but it doesn't look like it will love down from that level just yet. Some times we look for a pull back at this point but I do not expect it to just happen. Other (click to enlarge)signals looks too strong.

    MACD- The MACD is also very bullish and even though the RSI looks like it is in over bought territory, the MACD MA's are not supporting a pullback just yet. They are moving parallel and strongly point to a continued journey upward. I can see it leveling out but it is not showing any signs of slowing down yet.

    Bollinger Bands- The stock continues to climb as it hugs the upper band and this is about the strongest type of sign we can get of a bullish climb. It is on the second leg of a its bullish trend and the present momentum would have me assume that a pullback would have the stock moving sideways toward the middle band.

    Current Events

    Happy days are here again.......Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

    "Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

    The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

    Do not Lose Track of Europe..International bankers and finance ministers warned on Saturday that Europe's crisis was not over even though the euro currency is now stabilized, it will take years to overcome economic malaise and mass unemployment in Europe.

    China's economy could grow at more than 8 percent in 2013, giving some underpinning to global economic activity that is set for a mild, tortuous recovery this year, the head of China's sovereign wealth fund said on Saturday. China's economy expanded an annual rate of 7.9 percent in the fourth quarter of 2012, snapping seven consecutive quarters of weaker growth, as a raft of pro-growth policies kicked in.

    The Q4 bounce helped lift full year growth in the world's second biggest economy to 7.8 percent which, though China's slowest pace for 13 years, generated roughly a third of global economic growth of 3.2 percent - itself the worst since the 2009 financial crisis and just barely above the 3 percent mark economists say signals a worldwide recession.

    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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