6/30/2012 SPY #12

S&P 500 Cash Equity (SPY)

(Daily)

-          Like I said in the last post, the SPY made a new high outside of the range and then retreated back into the range. Now that the SPY is back above the range, the stock will most likely continue higher. I'm using the upward sloping channel as a reference and expecting the SPY to form another higher high nearer the top of the channel before any pullback happens.

-          On the upside, SPY should encounter the 1^st resistance level @ $136.91 and 2^nd resistance level @ $139.21. Judging from the current move, I doubt the stock can reach the 2^nd resistance level next week, a pullback should come in the next few days.

-          Because this is the 2^nd time the SPY broke out of the range, I'm expecting heavier supporting strength as the stock pullback to the range top level @ $134.22. Noticing the 50 day moving average (50 SMA, grey in color) is also sitting at the same level, this should provide the SPY another source of support.   

-          Nevertheless, the SPY gapped up on Friday and pushed higher. If anytime in next week the SPY breaks below the 2^nd gap level @ $134.86, be careful of a quick gap fill @ $132.99. I don’t suggest any long position into the gap. Flatten all the long position if SPY breaks the $134.86 level; wait for the stock to come down to the bottom of the uptrend channel or some sign of reversal before going in long again.

(Hourly)

-          Keep in mind that July 4^th is a national holiday therefore the volume is going to be low in the upcoming week. I don’t think there will be any major move after Wednesday unless a major news breakout. The SPY will probably chop sideway and do nothing after Wednesday because a lot of people are taking a long weekend off.

-          I add another minor resistance level @ $136.25, which is the previous week high. Given the strong move on last Friday, I think the SPY will most likely move higher on Monday but the up move is going to be slower in pace because of low volume and diminish in buying.

-          If the SPY retreats back into the range @ $129.93 - $134.22 next week, there is a support level @ $131.25 that comes from multiple bottoms of the past 3 weeks.

I hope this post offers you some insight, thank you for reading and please feel free to give me some feedback. 

6/23/2012 OIL #5

Light Sweet Crude Oil (/CL)

(Weekly)

-          Oil future dropped sharply in the last few weeks therefore I'm expecting some sort of pullback to happen. As it comes down to the support levels, short-sellers will probably cash in some profit by covering some of their positions, bringing some more buying pressure to the oil future market.

-          A major support level in this chart is the range bottom level @ $75.3. This level isn’t just the low of 2011 trading range, it is also where the future price double bottomed, therefore some buying volume should be seen around this level. However, if this level doesn’t hold, the next major support will be the 2010 consolidation range bottom @ $69.48.

-          The 200 SMA (white in color) is always a big support, even the future price dropped through it last week, as long as the next weekly candlestick doesn’t opens and closes below the 200 SMA, using the white moving average as support is still valid.  

-          The uptrend line from a few years back indicates the future is at the low of the trading channel, if this trend line holds, a bounce should happen in the next 1 to 2 week.

-          I drop a Fibonacci retracement study for the reason down move. When a pullback happens, I usually look for the price rises back to the 50% retracement of the 1^st move @ $92, then reverses and continues in the 1^st move’s direction (3^rd move). The other percentage levels can be reversal points too depending on the strength of the future; the deeper it pullbacks, the weaker the 3^rd move will be.   

(Daily)

-          The oil future was trading in a range @ $81.07 - $86.53 for the last 3 weeks until it broke to the down side on Thursday. The ranged move, highlighted in dark green, was a consolidation, the move highlighted in light blue were the 1^st and 3^rd moves, showing a complete 1-2-3 pattern. Notice that there’s still some room for the 3^rd move to go a little further, unless the future rises back in to the $81.07 - $86.53 range again, otherwise expect the future completes the 3^rd move near the 2012 range bottom @$75.3.

-          A bearish golden cross in this chart suggests a continuous bearish trend and triggered the breakdown a week after the signal occurred. Nevertheless, as the future comes down to multiple support levels, the strength of the bearish signal shall diminish.

-          When a pullback happens, the future should find some resistance back in the range, especially at the range top @ $86.53. Another resistance level is the previously double bottom confirmation level @$90.09. By the time the future rises up to this point, the 50 day moving average (50 SMA, grey in color) and the downtrend line from the previous downtrend channel will serve as resistances, pressuring the future from rising any further.

(Hourly)

-          The oil future broke out from an inverted head & shoulders pattern last Friday, the target on the break out is the range bottom level @ $81.07, which was the beginning of the pattern. The breakout move isn’t done yet, if by any chance the future price retreats, the neckline level@ $78.76 of this pattern will be a support.

-          Draw a downtrend line connecting all the recent tops will give you a better picture to see where the next top should be when the future moves back into the range. On the other hand, there is a 200 SMA (white in color) serves as another short term resistance when the future price trades in the range again.

 I hope this post offers you some insight, thank you for reading and please feel free to give me some feedback. 

6/17/2012 SPY #11

S&P 500 Cash Equity (SPY)

Hi all, I AM BACK!!! Sorry for stop updating the site due to some personal reasons, but I am bringing the site back up again, so please come check it out from time to time. I will do my best to give you reliable support/resistance levels and underlying trend in the market.

(Weekly)

-          The SPY hasn’t broken the uptrend channel yet, so I expect it to continue higher within the channel. And more supporting strength should be found as the candlesticks moving closer to the bottom of the channel

-          On top of that, the 50 week moving average (50 SMA, grey in color) supported the stock around $128.59 for the last 3 weeks. The 50 SMA offers an extra layer of support if the SPY tries to drop again.

-          The SPY closed on a 3 week high last Friday, showing some strength in the market. But there is a resistance level @ $135, which comes from the head and shoulder pattern of last year. If SPY is able to clear the $135 level, the next major level will be the double tops resistance/breakout level @ $141.87.

-          And notice that the trading volume in 2012 is quite low comparing to last 3 years. Investors are afraid to invest due to the European debt crisis; right now they are either keeping their money off the table or shifting their investments into safer asset classes. Therefore, I think making short term trade is better off at the current situation.

(Daily)

-          The SPY tried to breakdown on the consolidation range and push lower, but then the stock immediately gapped back up to the range, resulting in a 3 day bear trap that trapped all the short sellers who shorted the stock underneath the range bottom @ $129.66. A bull/bear trap is a false breakout and it usually signals a short term trend reversal.

-          The rising 200 day moving average (200 SMA, white in color) is a major support to watch; as it comes closer to the gap support level @ $129.66, the SPY should be able to stay above the bottom of the range for a short period of time.  

-          There are also 2 medium term supports. The first one is the gap support @ $129.66, which is also the consolidation range bottom, and the second one is the bear trap low @ $127.14. Once the SPY breaks below the gap support level @ $129.66, look for a quick gap fill @ $129.25; and if the selling pressure persists, the stock most likely will retest the level @ $127.14.

-          The news on Greek election came out on the optimistic side today, so I'm expecting the SPY to push up a little bit higher this week. However, multiple resistance levels seeing here: range top resistance @ $134.22, shoulder tops resistance (from weekly chart) @ $135, and the declining 50 day moving average (50 SMA, grey in color) @ $135.09. Therefore, I'm looking for a peek-a-poo new high outside of the range here and an immediate retracement back inside the range.

(Hourly)

-          In a smaller time frame chart, you can see the SPY was trading within a smaller consolidation range @ $131.25 - $134.22 in the last 7 trading days. This gives us a range reference for next week’s move.

-          If you take a look at the left side of the chart, you should see an unfilled gap that started around @ $134.5. If the stock breaks above the shoulder top resistance level @ $135, expect the SPY to quickly push another $.52 cents and fill the gap @ $135.52.

-          A bullish golden cross appears in this chart, signaling a continuous bullish trend in the near future. A bullish golden cross happens when the rising 50 SMA crosses above the declining 200 SMA. If you look at the left side of the chart, you will see a bearish golden cross where the 50 SMA crossed below the 200 SMA, the bearish trend continued for about 3 weeks from thereon.     

I hope this post offers you some insight, thank you for reading and please feel free to give me some feedback.