Ok--over the past 6
months I have tried to approach the marketfrom differing points of view, with
my own commentary mixed in. As the market advances or declines, my goal
in writing this every day is to give traders perspective on what I am seeing in
the price action so you can use it as a valuable piece of information in your
trading decisions. I am a technical trader, so I view the news of the day
as just noise, or expressed another way, the price is a reflection of the
news. But trends and signals are built by price, and key reversal areas
are where I want to give you a heads up.
What I see right now
on the SPY is a reversal area. SPY price has pulled back for a little
over 3 weeks to a natural support level. I define a natural support level
as a moving average or trend line, and in this case, the SPY is close to both,
making it a better place to say that the market is poised for a bounce.
I was watching the
hourly chart today, and what was interesting to me was that we have been in a
pullback for 3 weeks, following a well-defined down trend line on the hourly
chart. However, we broke that trend line the other day, and today as well. Even though we opened high and traded down,
the last candlestick of the day bounced on the other side of that trend line.
That has me encouraged that the SPY is ready to bump up in the next few
days. My expectation for the rest of the week is to see the SPY climb
higher.
But always remember--trends
can change, and if the SPY breaks below $144, the pullback would continue until
another reasonable area of support is reached at around $140.
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