Hi there,
and welcome back to Stock Charts R US blog.
and welcome back to Stock Charts R US blog.
After a healthy rally back into resistance the SPY has put in a weekly Key Reversal (where the market opens higher than the previous week but then closes lower than the two previous weeks' lows). A bearish signal in itself (refer to technician's minimanual for help with Bearish Key Reversals) this price pattern suggests a downside target of $130.70 [($144.30-$137.50)-$137.50] should the $137.50 level be broken. That corresponds roughly with the convergance of the two year uptrend line and the six month downtrend line (marked with a big circle). Considering the robust energy sector and the lackluster financial sector, a correction back into the $130 area on the SPY shouldn't be too big of a surprise going forward.
Brian Beamish FCSI
The Rational Investor
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