Sunday, June 17, 2012

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.  

No comments:

Post a Comment