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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: Look For A Pullback 0 comments
    Jul 29, 2012 11:07 AM | about stocks: SPY

    Technically Speaking

    RSI- I know we shot up quickly the last two days of last week, but I am not convinced that it will continue and we are just going to keep moving up, at least not yet. This is the highest it has been since April, but the strength of the move is still not climbing. With the RSI, this is what we want to see to measure strength. I am still convinced this is short term. (click to enlarge)

    Bollinger Bands- The SPY has pushed through the top of the band again and if it continues in the same pattern expect it to move down sometime this week. I will not be surprised if it possibly moves up or hugs the top of the band for a day or two. It has just brushed the top of strong resistance also.

    MACD- As I have stated before, the MACD continues to support the RSI and this move is weakening so I am not bullish on the stock at all. The negative divergence continues to form and gets stronger each week. I cannot say we are going to have along term bull movement because of this.

    Current Events

    Political leaders in Greece have agreed on most of the austerity measures demanded by its creditors and are now eyeing pension and wage cuts to find the final 1.5 billion euros of savings still needed, a source close to the talks said on Sunday.

    Greece must find savings worth 11.5 billion euros for 2013 and 2014 to satisfy its increasingly impatient lenders, who are currently visiting Athens to evaluate the country's progress in complying with the terms of its latest bailout.

    Earnings this week pretty much confirmed what investors already knew - the global economy is weak and consumers are hesitant. Consumer staples companies, however, have been consistently beating earnings estimates so far this earnings season. With some big names on tap this week, the question is: will the trend continue?

    Both the Federal Reserve and the European Central Bank meet, and while they may take some action, neither is expected to deliver the whole menu of items looked for by markets. At the end of the week, the July employment report looms large and is expected to show on Friday that just 100,000 jobs were added this month in a slow growing U.S. economy.

    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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