There is no change on the daily chart as SPY affirmed support at 133 with a bounce over the last few days. On the 60-minute chart, SPY pulled back rather sharply after the breakout surge last week, but ultimately held support and moved above 135.5 today. The short-term trend is up and I am marking support at 134. The trendline extending up from last week's low and Monday's low mark support here. As far as I am concerned, this 2-day bounce needs to hold to keep the short-term uptrend alive. A decline that erases this bounce would show weakness and argue for a short-term downtrend. Technically, SPY is also at a very important short-term juncture. With this bounce, the ETF retraced 62% of last week's decline and RSI moved to the 60-65 zone. These levels could mark resistance or a bearish reversal point.
Key Economic Reports/Events:
Wed - May 11 - 07:00 - MBA Mortgage Index
Wed - May 11 - 10:30 - Oil Inventories
Thu - May 12 - 08:30 - Jobless Claims
Thu - May 12 - 08:30 - Producer Price Index (PPI)
Thu - May 12 - 08:30 - Retail Sales
Thu - May 12 - 10:00 - Business Inventories
Fri - May 13 - 08:30 - Consumer Price Index (CPI)
Fri - May 13 - 09:55 - Michigan Sentiment
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.
