The analysis in this daily report on Art's Charts is short-term oriented, which can be from a few days to a few weeks. Medium and long-term analysis can be found in the Market Message, which is produced by John Murphy and myself. The Friday indicator summary on Art's Charts is medium-term oriented. As far as I am concerned, the medium-term and long-term trends for SPY remain up. The ETF just hit a new 52-week high in mid February and the current decline retraced around 50% of the December-February advance. Corrections after big advances are normal. We have yet to see a topping pattern (double top, head-and-shoulders) and the ETF has yet to break a major support level on the daily or weekly chart.
On the 60-minute chart, SPY became oversold on Wednesday and bounced with a gap up on Thursday. An oversold bounce back towards the broken support levels around 129.5-130.5 is possible. Key resistance is set at 131.50. The majority of short-term evidence remains bearish as well. RSI dipped below 30 a few times in the last four weeks and needs to break 65 to turn momentum bullish. The short-term breadth indicators plunged below their bearish thresholds in late February and early March. These indicators also became way oversold on Wednesday and are ripe for a bounce. The chart below shows the 10-day SMA for NYSE Net Advancing Volume ($NYUD) reaching its lowest level since late August.
Key Economic Reports/Events:
None on Friday – TGIF.
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/Events:
None on Friday – TGIF.
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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