Things to keep in mind that the SPY is still bullish:
1. Above 200 day EMA
The current market is still trading above its 200 day MA. Above the 200 day is where the bulls live and nothing has dramatically changed that.
2. Volume Picks up into Support
Volume is usually going to pick up heading into a support level so as we dipped into the close on Wednesday at $135.90 the volume was way up at 235 million shares the next volume of that magnitude was surprisingly enough when SPY tested support in March and the volume there was 202 million shares, and if price expands into the support level, $135 here, and does not break, it signals that there is some upside to come.
3. The candles sticks tell the story.
The candlestick pattern was a harami pattern which shows the existing trend was heading down at the bottom of this pull back is a BIG RED CANDLE STICK. The following day the bears slowed down by the gap up and the neutral doji. The confirmation came today with the big price move. This is called a Three inside up formation.
4. Convergence of 3 Support Levels
Three levels of support are converging
Horizontal Support at $135
Trend line Support since December
50day EMA support
Earnings
Look for this reversal to continue as we have earnings that are solid. Google announces after hours and it looks like they are going to come out positive and do some sort of stock split.
J. P. Morgan and Wells Fargo announce earnings tomorrow and both are well positioned for profits in the first quarter.
Not much on the economic news tomorrow CPI and Core CPI but they will hardly move the needle, and keep an eye on Spanish and Italian Bond Yields.
If you find this information helpful we have a Weekly Video Newsletter that goes in more depth and detail. Click here for more details.
Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.
No comments:
Post a Comment