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SPY At Rising Wedge Resistance (Again)

|Includes:SDS, SPDR S&P 500 Trust ETF (SPY), SSO

Most of the bearish chart configurations that appeared in the spring have flitted away harmlessly. The breakdowns that were teased never came to fruition. There is one major index that remains in the long term pattern that (still) portends trouble: the S&P. SPY has formed a clear rising wedge from the 2009 bottom. SPY is currently testing the upper bound of that pattern.

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The iShares Financials ETF (NYSEARCA:XLF) remains an interesting short candidate to me. I was duped into declaring early victory a month ago and XLF has since rallied. But it continues to contend with 50% retracement Fibonacci resistance from its 2007-2009 decline. It is also at the very end of a multi-year rising wedge pattern.

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Another interesting short candidate to me is LLL. It has been in a steep rising channel for over a year. A rising channel is typically a bullish pattern, so I am not overly bearish... but flat revenue and profit growth for years, and a double in price over the last 12 months. It seemed tempting. The doji star a couple weeks ago looks like (at least a temporary) top.

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Disclosure: The author is short LLL, XLF.

Stocks: SPY, SDS, SSO