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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: Are We Done Moving Bullishly? 0 comments
    Apr 6, 2013 11:27 AM | about stocks: SPY

    (click to enlarge)

    Technically Speaking

    RSI- the RSI indicator continues to reveal a negative divergence this recent low though did not move lower than the last on we saw so I'll keep my position the same that I believe were going to continue to see weakness in the movement of the stock based upon what I see in this indicator.

    MACD- as with the RSI indicator, the MACD is also showing a negative divergence and this strengthens the whole concept of a in the movement of the markets. When both these indicators are mirroring the same divergence is usually good indicator of weakness. Even though weakness is showing, there is no sign that the stock is going to have a complete turnaround yet because it still looks very strong and momentum is strong.

    Bollinger Band- I believe we have identified the end of the third leg of the bullish move for the S&P 500. This last leg, or this last move down is what showed it. Where do we go from here? I would be surprised if the stock didn't start moving sideways now for a period of time, it looks to strong to just reverse.

    Summary- I am of the opinion that the SPY is going to slow down because I have been able to identify three legs of the bullish trend. I can't say for sure the stock is going to turn around and now become bearish, because momentum appears to be pretty strong. But I do believe a continued upward movement may have to wait and the very best I see in the near future is the stock moving in a sideways trading channel and this may be the beginning see as one.

    Current Events

    While Wall Street pared much of its early losses by market close, all three major indices still ended in the red for the week. But now it's on to next week, when corporate earnings will be in keen focus yet again as Alcoa gets things moving on Monday after the bell.

    This time around we're coming off the fiscal cliff," Peterson noted. That could mean that estimates could continue to be conservative.

    With overall sector trends in mind, Vanguard Telecom Services ETF (VOX) and Consumer Discretionary Select Sector SPDR (XLY) are expected to see an upward trend, while Energy Select Sector SPDR (XLE), Industrial Select Sector SPDR (XLI) are expected to take a hit.


    American employers hired at the weakest pace in nine months in March, a sign tax hikes that kicked in early this year as part of Washington's austerity drive could be stealing momentum from the economy.

    March's slowdown in job growth could make policymakers at the Federal Reserve more confident about continuing a bond-buying stimulus program. Prior advances in the labor market recovery had fueled discussion at the central bank over whether to dial back the purchases, perhaps as soon as this summer.

    The construction sector added 18,000 jobs, reinforcing the view that a recovery in the housing sector has become entrenched. Separate reports on Friday also gave upbeat signals. The U.S. trade gap narrowed in February due to rising exports and falling crude oil imports, while U.S. consumer credit that month recorded its biggest increase in half a year.

    Some economists cautioned against reading too much into the report, though the data nonetheless raised questions over whether the strong hiring seen in the winter actually meant the economy had shifted into a higher gear.

    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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