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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: Watch Out For Friday The S&P 500 Could Drop 1 comment
    Jun 1, 2013 8:37 AM | about stocks: SPY

    Technically Speaking

    RSI- last time the RSI indicator touch the 50 day moving average, it defined below. This touch was just under the 50 line in that it bounced back up. This is the pattern it had the last three times in a row for the SPY and if it does it again I believe the stock will continue to move up. But you have to wait and see on this because it doesn't look like the RSI is finished moving down yet.

    MACD- after the same manner, the MACD indicator defined a top and then started to move down but the moving averages do not look like they're finished moving down yet. In fact, it looks like they're still spreading apart which is an indication to me that as the week progresses there still going to move down.

    Bollinger Bands- I would expect the stock to move down and touched the lower Bollinger band. I believe it could happen this week and I wouldn't be surprised if it took a bounce move back up and came back down and tested it again. I am looking at a combination of the lower Bollinger band and the 50 day moving average to see what the stock does in terms of defining a support level.

    Summary- there is no doubt the stock still looks like it's moving down. In fact in my observation it looks like the stock has not yet found a base in this wooded searching for. If it's going to move back up eventually I don't believe it's going do at this coming week because the momentum is still bearish in the short term.

    Current Events

    Standing conventional stock market wisdom on its head, investors may wish for weaker-than-expected employment numbers next Friday. A strong jobs report could prompt an early end to the Federal Reserve's policy of pumping money into the banking system to rescue the economy and set off the stock market's long-awaited pullback.

    The Fed's loose monetary policy since the end of 2008 has kept interest rates low and propelled stocks to record highs.

    To be sure, better-than-expected jobs data would be evidence of strength in the economy, a positive for the market in the long run, so any pullback could be short-lived.

    A rotation out of high-yielding dividend stocks has already begun because of the rise in U.S. Treasury bond yields.

    Dividend stocks had been among the market's leaders for much of this year's rally as investors favored those shares over fixed-income securities in a low interest-rate environment.

    A preview of the jobs picture will come on Wednesday with the release of a report from payrolls processor ADP. Economists polled by Reuters have forecast that the ADP data will show private-sector employers added 165,000 jobs in May, compared with 119,000 in April.

    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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  • SeekingTruth
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    Comments (1561) | Send Message
    Since first of this year, most highly observed Tech. Ind.'s have been of little or no real assistance, at least not to me.
    The only thing I can say is that the market's "Cup of Euphoria" finally overflowed at very toppy valuations, as logic would suggest it would.
    So the high fully valued peak price in the S&P was probably the best indicator of all, and the market seemed determined to get there in almost a straight line. at an early annual date.
    Even so , put buying is difficult because we don't have a "bounce point" that we can rely on, or at least I don't have one in this rigged market.
    Maybe the new refined rigging techniques have goten the best of me.
    If you have seen anything in the TI's that would have been of strong assistance "AT THE TIME IT WAS HAPPENING" please point those occurrences out to us with your analysis and justification because I detected nothing that was substantial enough and actionable enough in the classic TI's since the first of the year except the obvious and only in hindsight: that we were in a strong uptrend, (channels, BB's, MA's, trendlines, etc).
    In contrast, the last several years prior to this one, the classic TI's have given reasonable assistance in devining probable intermediate market tops and intermediate bottoms.
    But this year, all the "classic" TI's like RSI and MACD were of little use as I was able to assess them.
    In other words , if one bought downside insurance before last week, it was too early and of little benefit until now, and even now it remains unusually difficult to assess how much it could help.


    Of course, this may be the result of my non expertise and shortcomings. Maybe you can help alleviate that. Thanks.
    2 Jun 2013, 03:26 PM Reply Like
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