Major Market Hurdles Just Ahead Says Market Timer Frank Kollar

September 18, 2009 (FinancialWire) (By Frank Kollar)

While the S&P 500 Index (SPX), and its tracking ETF the S&P Deposit Receipts (NYSE: SPY) seem to be in a never ending rally, there may be trouble just ahead.

Looking at the SPY; the 50% retracement of the entire bear market decline from the October 11, 2007 highs at $157.52 to the March 6, 2009 lows at $67.10 are just above current levels.

$112.31 marks the 50% retracement and this is very likely to be a huge resistance level if and when the stock market gets there. This is about 4.7% higher than Thursday’s September 17 closing price.

Considering current momentum, there is every chance the SPYDRs will get there in coming weeks. When they do, watch for a bearish reversal pattern to mark the beginning of an overdue round of profit-taking.

On the positive side, a solid close above $112.31 would likely lead to a continued rally to the next resistance level, the 61.8% retracement all the way at $122.98.

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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