There is no change on the daily chart as SPY remains just above the Raff Regression Channel extension. SPY affirmed channel support with a reversal day on Monday and bounced on Tuesday. There was not much upside follow through after Tuesday's strong open as the ETF stalled around 120.5. Nevertheless, the bounce is holding and the uptrend remains. Support for the daily chart is set at 118.50. A close below this level would reverse the uptrend that has been in place since mid February. Look for RSI to break below 50 for confirmation.
On the 30-minute chart, SPY held the gap and established short-term support at 120 with a bounce at the end of the day (last bar). This is the first support level to watch for signs of a reversal. A strong breakout and upside gap should hold. A move below 120 would question bullish resolve. A decline from current levels would also raise the possibility of a lower high this week, which would also be an early indication of a short-term trend reversal. In the indicator window, RSI broke below 40 on Monday and reached its lowest level since February 8th (some 12 weeks ago!). This tells me that downside momentum on the last decline was the strongest in 12 weeks, which is significant.
Economic reports:
Thu - Apr 22 - 8:30AM - Initial Claims
Thu - Apr 22 - 8:30AM - Continuing Claims
Thu - Apr 22 - 08:30AM - PPI
Thu - Apr 22 - 10:00AM - Existing Home Sales
Fri - Apr 23 - 08:30AM - Durable Orders
Fri - Apr 23 - 10:00AM - New Home Sales
Charts of interest: HRB, IBM, MHP, NBR, NVDA, RIMM, WAG
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.
Economic reports:
Thu - Apr 22 - 8:30AM - Initial Claims
Thu - Apr 22 - 8:30AM - Continuing Claims
Thu - Apr 22 - 08:30AM - PPI
Thu - Apr 22 - 10:00AM - Existing Home Sales
Fri - Apr 23 - 08:30AM - Durable Orders
Fri - Apr 23 - 10:00AM - New Home Sales
Charts of interest: HRB, IBM, MHP, NBR, NVDA, RIMM, WAG
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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