SPY remains overbought with a few sentiment indicators showing excessive bullishness, but there are simply no signs of signficant selling pressure. With yearend approaching and seasonal patterns largely bullish, stocks could simply remain overbought and hold their uptrends. I am concerned with the sharp rise in interest rates, but stocks seem to be immune so far. At the end of the day, it is the trend that counts the most and there is no denying the current uptrends, both medium-term and short-term. As far as the daily chart is concerned, the November lows hold the key to the uptrend. A move below would forge a lower low and signal the start of a downtrend.
No change. The 60-minute chart confirms the first support level around 122. The exact resistance breakout is just a bit higher, but SPY established support with a few bounces last week. A move below 122 would be the first sign of short-term weakness. I am also watching RSI with support in the 40-50 zone. A break below 40 would turn momentum bearish.
Key Economic Reports:
Wed - Dec 15 - 07:00 - MBA Mortgage Applications
Wed - Dec 15 - 08:30 - CPI
Wed - Dec 15 - 08:30 - Empire Manufacturing Survey
Wed - Dec 15 - 09:15 - Industrial Production
Wed - Dec 15 - 10:30 - Crude Inventories
Thu - Dec 16 - 08:30 - Initial Claims
Thu - Dec 16 - 08:30 - Housing Starts/Permits
Thu - Dec 16 - 10:00 - Philadelphia Fed
Fri - Dec 17 - 10:00 -Leading Indicators
Charts of Interest: Tuesday and Thursday in separate post.
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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.
Key Economic Reports:
Wed - Dec 15 - 07:00 - MBA Mortgage Applications
Wed - Dec 15 - 08:30 - CPI
Wed - Dec 15 - 08:30 - Empire Manufacturing Survey
Wed - Dec 15 - 09:15 - Industrial Production
Wed - Dec 15 - 10:30 - Crude Inventories
Thu - Dec 16 - 08:30 - Initial Claims
Thu - Dec 16 - 08:30 - Housing Starts/Permits
Thu - Dec 16 - 10:00 - Philadelphia Fed
Fri - Dec 17 - 10:00 -Leading Indicators
Charts of Interest: Tuesday and Thursday in separate post.
-----------------------------------------------------------------------------
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.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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