As you might expect, there is no change in the medium-term trend (daily chart) or short-term trend (60-minute chart). SPY is now up over 5% this month with gains on 11 of the last 14 days. In January, the index zigzagged higher with a choppy advance from ±125.5 to ±128. The bull started February with a gap and surge above 131 and the advance continued with a close above 134 on Thursday. SPY was up 2.33% in January and has already doubled that total in mid February. This Rate-of-Change seems unsustainable, but there are simply no signs of weakness. Trend and price action rule the roost right now. There are three support levels marked on the 60-minute chart. No sense talking pullback until SPY starts taking out these support levels.
Key Economic Reports/Events: None on Friday.
Charts of Interest: Tuesday and Thursday in separate post.
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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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