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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: Coming Into Consolidation Period? 0 comments
    Feb 17, 2013 8:31 AM | about stocks: SPY

    Technically Speaking

    RSI- the RSI indicator remains well into the bullish territory with no sign of coming down yet. After giving an over bought signal, it has barely come down and is now teetering at the upper 60's level with no sign of coming down, very bullish.

    Bollinger Bands- Last week, the stock looked like it moved sideways off the upper band. This is usually a sign of continued upward movement. This is exactly what we had this week, continued upward movement and it looks to continue. (click to enlarge)

    MACD- The MACD also continues to remain on the upper levels of its bullish territory. There are no signs at all of it starting to come down.

    This last week has confirmed that the SPY continues to make its strong bullish run. Though not as steep (the lean is slightly less upward) I expect it to continue to move up.

    Current Events

    Japan's expansive policies, which have driven down the yen, escaped direct criticism in a statement thrashed out in Moscow by policymakers from the G20, which spans developed and emerging markets and accounts for 90 percent of the world economy.

    Analysts said the yen, which has dropped 20 percent as a result of aggressive monetary and fiscal policies to reflate the Japanese economy, may now continue to fall.

    Russia, this year's chair of the G20, admitted the group had failed to reach agreement on medium-term budget deficit levels and expressed concern about ultra-loose policies that it and other emerging economies say could store up trouble for later.

    Odds of a pullback are increasing, with the market in slightly overbought territory. There could be a pullback as the closing of the earnings season will lead to at least a pause.

    In the coming days, the market will focus on minutes from the latest Federal Reserve meeting, due to be released on Wednesday, which could provide support if they suggest the Fed will remain on its current course of aggressive monetary easing.

    The Fed minutes released in January spooked markets a bit when they revealed that some Fed officials thought it would be appropriate to consider ending asset purchases later in 2013. U.S. Treasury yields rose on that news, though market worries about a near-term end to quantitative easing have since faded.

    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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