S&P 500 SPDRs (NYSE: SPY) Collapse
Says Market Timer Frank Kollar
August 20, 2010 (FinancialWire) (By Frank Kollar)
Both the S&P 500 Index (SPX) and it’s tracking
ETF the S&P Deposit Receipts (NYSE: SPY) collapsed
in heavy volume on Thursday, August 19.
This was not unexpected.
Tuesday’s August 17 rally pulled back almost 50%
by the close. Though there was a gain on the day, losing
substantial ground in the final hours on low volume is
bearish.
Wednesday’s August 18 rally faded in the final two
hours and the SPX and SPY closed with barely a fractional
gain. Again volume was extremely low.
Thursday’s decline started at the open, even though
premarket futures had factored in a nice gain at the start.
Nevertheless the market dropped immediately and stayed
down. The selling was on heavy volume. The SPX lost 1.7%
and SPY lost 1.8%.
A note on volume. This is near the end of August and volume
is always light with many traders and investors on vacation.
But even with these factors, Thursday’s declines
were on heavy volume.
Thursday’s close was at a new low for both the SPY
and SPX. In fact it was the lowest close since July 21.
The SPY has support at $106 and the SPX has support at
1056.88. If we close below these levels in coming days,
we expect declines to continue with a test of the July
1 correction lows probable.
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.
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