SPY psar bull signal

A quick look the new bull signal on SPY that kicked in late yesteday.

The signal ends a two-day bear whipsaw (which was counter-trend). The adx, at 26, is at a level that lies between whipsaw junky and directional saint.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
SPY $116.75

The recent history of SPY is too well known to require a long explanation.


The price peaked a $157.52 in October 2007. It declined to $67.10 in March 2009, and then began a long-running upward move that so far, at $116.75, has retraced more than half of the fall.

So at a macro level it's a good play. At a micro level, there are some signs that suggest a cautious approach: The macd has been in a decline, broken only once, since March 9. The sto has moved below the overbought line into neutrality, a bear signal.

I would like to see a break above yesterday's high -- $117.51 -- before entering into a directional trade to the upside.

You are here:

• Reversal
• $131.51,  +12.6%
• $128, +9.6%
• $121.91, +4.4%
• Now $116.75
• Reversal
• $115.24, -1.3%
• $114.60, -1.8%
• $108.94, -6.7%

Note that there's a lot of room to run to the upside, and good close reversal levels to the downside. From the standpoint of reversal levels, what's not to like?

The related broad market exchange-traded funds, QQQQ, IWF and IWM, showed a similar signal pattern. I won't be giving them separate coverage at this point.


Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: green for up, red for down, yellow for sideways
• adx: green for above 30-up, red for 20-down, yellow for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.