50 Shades of SPY

• Posted by Greg Harmon
• on April 11th, 2013

This market has been strong. Despite published bullish sentiment being high, I continually hear from professionals that they are looking for a pullback. Not all of them, but some are Titans. Many have a long term view that the market goes higher but want to see a ‘healthy’ pullback first. This has been going on since November. And it has been one of the reasons that the market continues higher. We will eventually get a pullback. But how long do you want to continue to call for one and be wrong? Is there some kind of prize for picking the top? Are dollars made shorting worth twice as much as those made just going with the trend because it is harder? I don’t think so but then I have not been in school for a while now. I am very happy to let the wind blow at my back as I look for opportunities. And while I am perusing, the current market looks great on multiple timeframes. I promised you 50 Shades of SPY but how about just 4 for now.

$SPY 5 minute

This short term view with extended market hours data shows a bullish flag to end the day and into after hours Wednesday after a strong rise from the 157.25 area. The Measured Move higher takes it to 160.25. Bullish.

SPY daily

The daily view is also very bullish. Breaking a channel between 153.70 and 157.10 it has expanding Bollinger bands, a rising and bullish RSI and a MACD crossing and turning higher. This gives a projection to 160.50.

SPY weekly

This weekly picture is so simple. The Renko chart with its white bricks marching higher clearly shows the SPY on a buy signal as it reaches the all time high from 2007.

S&P 500 Monthly

The monthly view on the S&P 500 using the Elliott Wave chart above continues to show the potential for massive upside price action. It could all end in the short term with that (3) printing and the start of wave (4). But lets wait for that to happen.

None of these need to continue, but why fight them? If it reverses then you can try the short side. I promise I will not look down on you for waiting for confirmation first.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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