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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 Europe this Week 0 comments
    Jun 24, 2012 5:08 PM | about stocks: SPY

    Daily Trade Analysis

    RSI- well there is no doubt that the short positive divergence that formed brought a bullish move to the SPY as we can see in the chart. On the high side, we are not sure that the slight positive divergences in the RSI (in light blue) mean anything. If could just mean that the move up was stronger than the last one. And that is not hard to see. Otherwise, the RSI follows the chart. (click to enlarge)

    Bollinger Bands- having touched the top of the band, the SPY side up a little. Normally when this happens the stock does not pull way back down immediately. At his point it would not be out of the question for the stock to move sideways a bit and then move down again. But an immediate drop is not likely.

    MACD- referring back to the noticeable positive divergence in the highs, not sure if it s meaningful. Could just be showing a higher move up. The shorter MA lines are not showing the same thing though. I expect much weaker moves up now if it continues to move sideways.

    Current Events

    Bank Stocks--Bank shares, among the worst hit on Thursday, rose after Moody's Investors Service announced credit downgrades for 15 of the world's largest banks. The downgrades had been expected, but some were less severe than feared, which helped boost those shares on Friday.

    Greece's new prime minister and incoming finance minister, who have been ill, will miss this week's EU summit when Athens will propose easing the terms of its bailout and international lenders have had to postpone a first meeting with the team.

    These are the words some prominent American investors and strategists are using to describe the worsening debt crisis in the euro zone and its impact on the global economy.

    While growth has been slowing in China and the United States and companies warn about the effect on earnings, there is a mounting sense among the financial community that politicians and markets are operating on two completely different timelines.

    They see a fractured Europe fiddling in the near term, attempting to seal one fissure as another larger one appears while they talk about a five-to-10-year timeframe for real solutions, such as a more fiscally integrated euro zone. They see investors who want solutions in the next few weeks and months or else nations like Spain and Italy could find they cannot borrow at all on capital markets, starting an economic firestorm that would make today's problems seem mild.

    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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