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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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  • EFT SPY: Watch Apple  0 comments
    Apr 20, 2013 8:49 AM | about stocks: SPY

    Technically Speaking

    RSI- the RSI indicator has dropped through the "50" line for the first time since the end of February when it had a strong turn down. This would officially marks the end of the third leg of a bullish run and I believe very strongly that it marks the beginning of a reversal or sideways movement.(click to enlarge)

    MACD- while it is true that the RSI continues to show weakness, one thing that I see in the MACD indicator is that momentum is still in bullish territory. Until I see the MAs move into bearish territory all I can say is it looks like the stock is slowing down, I cannot say it's going to reverse and turn around because momentum is still in bullish territory.

    Bollinger Bands- this is the third time we have seen this pattern as of bottom Bollinger band is now been sideways. The last two times we saw this is when the stock down like this and ended up forming a step as he continued to move up. But this time short term momentum appears to be weaker than it was the other times so I am interested in seeing if the Bollinger bands will turn down instead of sideways and then back up.

    Summary- unless the stock is built the many foundation that I am observing at the top, my experience would tell me that it's continued bullish run is at an end. I make these observations based upon many years of experience looking at different chart patterns. Time will tell.

    Current Events

    Apple may have lost nearly half of its value since its peak in September, but it's still the talk of the town. Only this time, it's all about how low can it go?

    Wall Street would normally be set for a technical rebound after a drop of more than 2 percent, the worst weekly decline so far this year. But that could easily change by the time the iPhone maker reports its earnings, which are due on Tuesday after the closing bell.

    Wall Street has been recently pressured by a slew of disappointing economic data and weaker-than-expected earnings reports from blue-chip companies like IBM. Of the companies that have reported, 67.3 percent have beaten analysts' earnings expectations, while just 43.3 percent have beaten revenue estimates. Revenue growth is seen at just 0.7 percent for the first quarter over the year-ago period.

    Economic indicators in the coming week will cover housing, manufacturing and a first look at first-quarter gross domestic product. In the housing sector, March figures for existing home sales are due on Monday and new home sales on Tuesday. Economists polled by Reuters have forecast slight gains in both March existing and new home sales over February figures.

    On Friday, Wall Street will get a snapshot of the broad economy, measured by gross domestic product, or the output of all goods and services inside U.S. borders. First-quarter GDP is forecast to have grown at an annual rate of 3 percent, compared with growth at an annual pace of just 0.4 percent for the fourth quarter.

    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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