Monday August 18, 2014 - 17:20:22 GMT
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Richard Cox -
Week Ahead: Stock ETF Chart Analysis - SPY
Stock markets could get some
more attention this week as the trading community starts to return to full
strength in terms of seasonal liquidity.
For most of this summer period, we have been seeing market reactions to geopolitical concerns in areas like the
Ukraine, Gaza, and Iraq. As a result, the SPDR S&P 500 Trust ETF (NYSE: SPY), iShares S&P Europe 350 Index (NYSE: IEV), and the iShares MSCI Emerging Markets Asia ETF (EEM)
have drifted lower in recent weeks.
It is possible at this stage
that we would need to see a real earnings catalyst in order to propel stock
prices higher, and this is possible this week given the series of retailers
scheduled to report their quarterly results.
These developments will be discussed on FXPips
in looking at new trading opportunities.
Here, we look at the latest technical developments in the broad regional
stock measures: SPY.
SPDR S&P 500
Trust ETF (NYSE: SPY)
Critical Resistance: 198.70
Trading Bias: Bullish on Dips
(Chart Source: CornerTrader)
S&P 500 / SPY -
Stock Trading Strategy: Stay on the
sidelines as prices approach previous resistance just below the psychological
200 mark. Instead, wait for dip back
toward 100-day moving average.
The long-term uptrend in SPY remains undeniable and we are now quickly approaching the
psychological levels found in the 200 area.
An upside break here would be an incredibly bullish event and likely
signal a new area in the average market valuations seen in the stock
index. We have seen the lows from the
summer quickly bought, and the lack of pullback caught many traders waiting for
better conditions. Instead, it is best
to wait on the sidelines here and wait for a dip back toward the 100-day moving
average (likely to be seen after the pop through 200). Daily
RSI has fully rebounded from just
above 30, so there is still some room to extend in prices before market
valuations become overbought again.
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