March 5, 2010
Both the S&P 500 Index (SPX) and it’s tracking ETF the S&P Deposit Receipts (NYSE: SPY) rallied above important resistance levels this week.
Last week we wrote; “Thursday’s huge intra-day loss, that reversed and closed almost unchanged for the day, points to more strength to the upside ahead. Any strength should push these indexes above the critical resistance levels. Thursday’s mid-day reversal to the upside was on a day when bad news dominated the markets. That is bullish.”
On Monday the SPX closed above 1109.98 the 61.8% retracement of the January to February declines and SPY closed above 111.10 the 61.8% retracement of the January to February declines.
Typically when the 61.8% retracement level is surpassed, the index, ETF or stock, continues higher to test the prior high. In this case that is the rally highs achieved in early January.
The targets for this advance are; 1115.06 the closing high for SPX and $1115.06 the closing high for SPY.
Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy has a position in the S&P 500 SPDRS