SPY Charts

SPY Charts today were looking bearish in nature and there is fresh batch of skepticism about the continuation of this run, and right now it feels a lot like the spring of last year with uncertainty in the air.

So what ran SPY lower today, and the rest of the Market, were the concerns over China and the GDP expectations there.  Now it seems crazy that an economy with an 8.1% GDP Growth rate is slowing down, and what we wouldn't give for half that, however there is a concern over Chinas GDP growth the chart below well illustrates the decline.


The good thing about this fall so far is that it is fairly timid but if it picks up pace it can really disturb the market dynamics around the world.  Europe is very dependent on China as a trade partner and a large chunk of Europe's imports come from the Chinese.

Consumer sentiment data was less than cheery today not terrible but enough to put another notch in the belt of uncertainty for the market.  It fell from 76.1 to 75.7



SPY Charts
After yesterday SPY is still hanging on the edge as can be seen below the trend line and 50 day MA are still helping to support the price, but the close today with the lows down below $138 it could be that $138 maybe becoming resistance.  The gap from Monday is at $138 and the last 4 days we have backed of $138 3 times.

Indicators
MACD - The MACD is showing the downturn the histogram is giving us a heads up as to the weakness in this bounce and is not quite ready to head back up.
RSI - The weakness on this is being shown at 50 with the turn down.




VIX
This is flashing some red signals and gives us a little more insight that SPY is coming to a rest wether that is temporary or long term remains to be seen.  But the telling part of the chart is the departure from the trend line and closing above the 50 day MA

 

My take on things if am trading the charts is that SPY and the market overall has had a 30% climb since the bottom in October and inevitably as we are trading the charts these markets will get tired and pull back and it could be for a few weeks.  This not uncommon November 2010 had a very similar pullback that took weeks to resolve.  The key here is stay disciplined and take what the charts are giving you.

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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.