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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
  • SP 500 ETF- SPY Weekly Analysis (7/14/10) 1 comment
    Jul 10, 2010 10:38 PM | about stocks: SPY

    SP 500 ETF- SPY


    The S&P 500 ETF ,” that uses the symbol “SPY,” has been influenced by the stock market this week. Its stock price stands at $107.96 As we learn in MSN Money Snaphot they write this about the Fund: “The investment seeks to correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Index. SPDR Trust is an exchange-traded fund that holds all of the S&P 500 Index stocks. It is Oracle comprised of undivided ownership interests called SPDRs. The fund issues and redeems SPDRs only in multiples of 50,000 SPDRs in exchange for S&P 500 Index stocks and cash."


    With a nice descending triangle is proof of a long term bearish pattern, but what of this last week as we have moved up.Usually when we go down, we continue that direction but we pushed up through the triangle. Where are we going now, have we hit the bottom?

    Ratio of stocks hitting new highs and lowsfor various time frames -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- We've got some strong bullish signs here

    • Ratio of stocks hitting 1 month new highs/new lows -- 754/219 = 3.44
    • Ratio of stocks hitting 3 month new highs/new lows -- 288/152 = 1.89
    • Ratio of stocks hitting 6 month new highs/new lows -- 238/116 = 2.05

     The best sign is that more stocks are hitting new highs than new lows, so the market is off its bottom range. Since only 52.63% of the stocks are trading above their 20 DMA but not their 50 and 100 DMA, the trend is very short.

    We are in the period of July into August when summer rallies of 10% to 12% often take place. So our rally might have some legs here for a bit. We would not be surprised if this is the case. But we also beleive this is short term, not a bullish market now.

    We will get a lot of news this week that will influence the markets. Thursday's announcements of the first time jobless claims being lower than expected helps, but losing close to half a million jobs is terrible! Overall, the news is still not very good.

    Markos Kaminis writes in his article is Seeking Alpha something that might give use a broader picture of the real movement in the stock market. "Continuing claims are declining, true, but these improvements have a lot to do with laborers falling out of the workforce. This was noted in the latest Employment Situation Report as well, and made the improvement in June's unemployment rate suspect (to 9.5% from 9.7%). If ever there were a sign of depression, it would be folks giving up on finding a job."

    We beleive a short term gain is in process and could easily continue another week on good news, but we do not believe we are in a bullish move now. We are still bearish in nature...the bigger picture. This is little more than a bear market rally.

    Disclosure: No Position
    Stocks: SPY
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  • bobertak
    , contributor
    Comments (6) | Send Message
    SPX on a weekly chart looks weak and headed lower
    11 Jul 2010, 01:08 AM Reply Like
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