Due to popular demand for the chart analysis of SPY, I shall post my analysis here.
Continue to tell me what stocks you would like me to analyze. You can post the stock names at the right side.
This is one of the most traded ETFs and it has some simple trading patterns. Look at the March low to the June high, the stock has consolidated before and seemed to have made a Head and Shoulders pattern. Many traders quickly shorted the stock in JULY, but it failed. This is one good example of a technical breakdown. It also shows the importance of using a number of technical indicators instead of relying on candlestick analysis only.
We have witnessed the strong support by the 200SMA.
Similarly, the trading pattern of the stock or ETF is looking just like the July stock pattern. We have been hearing many bears sounding the death knell of the recovery.
However, the fundamentals of the market are still quite good. 70% of S&P companies beat earning forecast.
OBAMA stimulus plan is going to jolt the market. So why is the market still dropping like a rock?
Today’s dismal unemployment claims report is one. We are still experiencing high unemployment rate. However, productivity is going up. This actually shows hint of a stronger recovery. Higher productivity=less job supply. Nevertheless, job creation has become the White House top priority, so why do we care?
Traders are relying on stock charts and taking advantage of the weak market sentiments to fufil the chart patterns. So we might just see the SPY price dropping to $103.50 which is a confluence of 2 FIBONACCI Lines, meaning it is a very strong support level.
All in all, tomorrow’s payroll report would have the biggest impact. Just take note traders will take advantage of just one thing – fear.
BUY SPDR S&P 500 ETF a.k.a SPY at $103.50
This is indeed a correction and panic selling.
No comments:
Post a Comment