Stock Market Stumbles Says Market Timer Frank Kollar

August 7, 2009 (FinancialWire) (By Frank Kollar)

Two weeks ago we wrote that the S&P 500 SPYDRS (NYSE: SPY) and S&P 500 Index (SPX) were nearing resistance levels that could stop this strong rally. Both indexes are now slightly above these levels and just holding on.

The S&P 500 SPYDRS topped the 50% retracement resistance level, at $98.80, for their August 11, 2008 to March 6, 2009 decline.

The S&P 500 Index topped the 50% retracement resistance level, at $987.47, for its August 11, 2008 to March 6, 2009 decline.

We wrote the 50% retracement was very likely to slow down, or even stop the advance. This is exactly what is happening as two days of selling have certainly slowed down the rally.

But on both days the stock market was lower intra-day and moved higher into the close, though not reversing all the day’s losses. This is what happens when profit taking hits. There are buyers trying to catch the lows. In the next day or so they may find it and the market could resume its upside March.

How high? For the S&P 500 SPYDRS this is at $106.22. For the S&P 500 Index it is at 1063.59.

The http://www.fibtimer.com ETF Strategy has a position in the S&P 500 SPYDRS.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

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