On the 30-minute chart, SPY retraced 50% of the prior decline with a surge to 116. SPY opened above 115 and held above 115 throughout the day. While impressive, I think resistance is closer than support at this stage. Support is around 111 from last week's lows. Resistance is around 118 from the 62% retracement and broken support. We could see some choppy trading as the markets digest recent gains and bailout news.
Key Economic reports:
Wed - May 12 - 10:30AM - Crude Inventories
Thu - May 13 - 08:30AM - Initial Claims
Fri - May 14 - 08:30AM - Retail Sales
Fri - May 14 - 09:15AM - Industrial Production
Fri - May 14 - 09:55AM - Mich Sentiment
Charts of Interest: CBB, ESI, FCN, IPI.
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for ourselves when it comes to trading our own accounts. First, it is the only way to really learn. Second, we are the only ones responsible for our decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. Among other things, this includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.
