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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: Can It Stay Positive In Coming Headwinds 0 comments
    Aug 5, 2012 9:14 AM | about stocks: SPY

    Technically Speaking

    RSI: there is no change in the pattern with the stock. It is neither good nor bad, as it moves sideways following the stock's bullish pattern. It is neither gaining nor losing strength. At this point I guess I would have to be neutral on it because I would be looking for a loss of strength and I just cannot see it in the RSI yet.(click to enlarge)

    Bollinger Bands: we have a consistently steady peak and valley bullish pattern in place but the last high will be challenging. 140 is a major resistance level. In the present pattern it is in, I would expect the stock to move down before it tries any significant move up to challenge and push through this level is it can.

    MACD: the MACD was showing negative divergence but now it also has leveled off. The leveling of these two indicators and identifying the strong resistance areas could make a case for a possible top--though not a strong argument, an argument on the less.

    Current Events

    Despite a ho-hum earnings season and central banks' disappointing hopes for aggressive economic stimulus this week, U.S. stocks held firm.

    After four days of losses, the benchmark Standard & Poor's 500 index (^INX) (^GSPC) rallied on Friday, finishing the week in the positive for a fourth straight time and reaching three-month highs.

    Sustaining momentum are valuations that make stocks attractively priced relative to other assets. To be sure, some corporate earnings have been impressive, especially in defensive stocks such as utilities.

    The trigger for stocks' surge was the Labor Department report that U.S. employers added 163,000 jobs to their payrolls in July, the most in five months. However, the unemployment rate, based on a different government survey, edged up to 8.3 percent.

    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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