Ominous Reversal
for the S&P Deposit Receipts (NYSE: SPY)
Says Market Timer Frank Kollar
August 12, 2010 (FinancialWire) (By Frank Kollar)
Both the S&P 500 Index (SPX) and its tracking ETF
the S&P Deposit Receipts (NYSE: SPY) have reversed
from important resistance levels. They have also broken
below a rising trend support line that forecasts lower
lows ahead.
Since early July, the SPX has created a rising wedge formation.
If you draw a line from the first rally high through all
the subsequent rally highs, it forms a rising trend resistance
line. Another line through all the lows since early July
creates a rising trend support line.
A break above the rising trend resistance line would be
bullish and a break below the rising trend support line
would be bearish. On Wednesday, August 11, the break to
the downside, and below the rising lower line of the wedge
pattern, was definitive.
The odds favor declines to at least SPY 106.50 in coming
days or weeks. A break below this level would point to
a test of the July correction lows at SPY 101.
Wednesday’s steep selloff is worrisome for other
reasons as well. The SPY reached its 50% retracement of
the entire May to July correction before reversing lower.
Wednesday’s decline puts the SPY back below its
50-day moving average as well as its 200-day moving average.
The possibility exists that we have just experienced a
bear market rally that has now run its course.
The Fibtimer.com (http://www.fibtimer.com)
ETF Timing Strategy has a position in the S&P 500 SPDRs
.
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.
Go to previous Press
Releases & Trading Notes.
Note: These Press Releases are short term in nature. They may or may not reflect the same position as current subscriber reports which typically have longer time frames.
© Copyright 1996-2010, Market Timing Strategies, Inc., All Rights Reserved.
FibTimer reports may not be redistributed without permission. These Trading Notes however may be distributed without permission.
Disclaimer: The financial markets are risky. Investing is risky. Past performance
does not guarantee future performance. The foregoing has been prepared solely
for informational purposes and is not a solicitation, or an offer to buy or sell
any security. Opinions are based on historical research and data believed reliable,
but there is no guarantee that future results will be profitable. |
