With Friday's advance, the S&P 500 ETF (SPY) is now up 11 days straight and 20 of the last 25 days. It is an almost historic run. The ETF was up 12 days straight on September 13th, 1995. After the September 1995 run, the ETF went into a 6-7 week trading range that ended with an upside breakout in early November 1995. With the ETF again overbought after the second biggest run in 15 years, the odds favor a consolidation or perhaps even a pullback. We could even see a combination of both with a falling flag over the next several weeks. This would involve a choppy trading range with a slight downward drift, which would not be easy to trade.
The 60-minute chart captures the current upswing. I am leaving upswing support at 112-113 for now. Since gapping up last Thursday, SPY worked its way higher within a rising channel last week. The first sign of weakness would be a break below channel support at 114.3. Notice how RSI bounced off the 50 zone to affirm momentum support. Look for a break below 50 as the first sign of weakening short-term momentum.
This week's economic docket centers around the Fed's rate decision on Tuesday afternoon (2:15). The market is usually volatile just before and after the announcement. Volatility settles after 3pm as cooler heads prevail and we then get our first clue on post-Fed market direction.
Monday Mar 15 - 9:15am - Industrial Production
Tuesday Mar 16 - 8:30am - Building Permits
Tuesday Mar 16 - 8:30am - Housing Starts
Tuesday Mar 16 - 2:15pm - FOMC Rate Decision
Wednesday Mar 17 - 8:30am - Core PPI and PPI
Wednesday Mar 17 - 10:30am - Crude Inventories
Thursday Mar 18 - 8:30am - Core CPI and CPI
Thursday Mar 18 - 8:30am - Initial Claims
Friday Mar 18 - 10:00am - Leading Indicators
Charts of interest: AMAT, ADBE, CB, CHK, EXPE, HRS, KLAC
This week's economic docket centers around the Fed's rate decision on Tuesday afternoon (2:15). The market is usually volatile just before and after the announcement. Volatility settles after 3pm as cooler heads prevail and we then get our first clue on post-Fed market direction.
Monday Mar 15 - 9:15am - Industrial Production
Tuesday Mar 16 - 8:30am - Building Permits
Tuesday Mar 16 - 8:30am - Housing Starts
Tuesday Mar 16 - 2:15pm - FOMC Rate Decision
Wednesday Mar 17 - 8:30am - Core PPI and PPI
Wednesday Mar 17 - 10:30am - Crude Inventories
Thursday Mar 18 - 8:30am - Core CPI and CPI
Thursday Mar 18 - 8:30am - Initial Claims
Friday Mar 18 - 10:00am - Leading Indicators
Charts of interest: AMAT, ADBE, CB, CHK, EXPE, HRS, KLAC
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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