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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 It Continue Up Monday! 0 comments
    Jun 10, 2012 9:40 AM | about stocks: SPY

    Daily Trade Analysis

    RSI- the SPY has barely pushed above the 50 mark into bullish territory. This in itself is not so significant as is the fact that we can see it has moved up on strength. One can see that the last two peaked are about the same height but the RSI is higher on the second. At the same time we can see a positive divergence on the lows and this also supports strength on the move up. (click to enlarge)

    Bollinger Bands- the recent push through the middle Bollinger Band is very significant. If the SPY had bounced off the middle band again and continued down, it would have strengthened and confirmed the long term bearish trend. The recent move does not mean there is no long term trend, but is does visually challenge the move down. This week will reveal much more.

    MACD- the MACD is supporting what the RSI is telling us. The SPY is continuing to push up on strength. Yes, last week was the best week the SPY had all year so far and that is why it looks so strong. Can we continue moving up on strength. Even a regression does not mean we are bearish because we may be able to push higher on the next rebound.

    Current Events

    U.S. stocks will get a lift on Monday after euro zone finance ministers agreed to lend Spain up to 100 billion euros ($125 billion) to help its battered banks.

    The surprisingly large amount of aid removes a huge cloud that has been hanging over financial markets, with investors fearing that a banking crisis in euro zone's fourth-largest economy could have compounded the currency bloc's troubles with Greece.

    Though the exact amount to be lent will be decided in just over a week, striking a deal now means Spain has added support in case Greece's June 17 elections throw financial markets into a tailspin.

    "This is a major step in avoiding a contagion," said Tim Speiss, partner-in-charge of EisnerAmper's Personal Wealth Advisors Group in New York.

    Iran's state finances have come under unprecedented pressure and the resilience of ordinary people is being tested by soaring inflation as oil income plummets due to tightening Western sanctions and sharply falling oil prices.

    Tough financial measures imposed by Washington and Brussels have made it ever more difficult to pay for and ship oil from Iran. Its oil output has sunk to the lowest in 20 years, cutting revenue that is vital to fund a sprawling state apparatus.

    Already down by more than a quarter, or about 600,000 barrels per day, from rates of 2.2 million bpd last year, shipments of crude oil from Iran are expected to drop further when a European Union oil embargo takes effect on July 1.

    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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