SPY Watch

The exchange-traded fund that tracks the S&P 500, SPY, is showing bull phase on the parabolic sar.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
SPY $117.24

At 2:25 p.m. Eastern

The signal is in line with uptrend that began in March 2009 at $67.10, and a near term upswing that began Feb. 5 of this year at $104.58. The swing high, on April 26, was $122.12.



SPY, like all of the broad funds, rarely rates as having a strong trend. It's an average of many stocks, and as a result of multiple offsets its trends tend toward the marginal (defined as below 30 on the average directional index).

The present adx reading 29 reflects the strength of the downtrend, exaggerated by the software-driven mini-panic of May 6, and so doesn't figure in assessing the likelihood of uptrend success.

The swing low of $109.41 on May 7 (ignoring the mini-panic low of the day before) is about $5 above the prior low. So that higher low sets up the possibility of an uptrend, if the price in fact does persistently break above $122.12.

If it fails to breakout, then a lower high could mark the beginning of a triangle pattern of some sort.

Reversal Levels

• $122.12, +4.2%
• $121.11, +3.3%
• $118.78, +1.3%
• $118.59, +1.2% (20-day moving average)
• $117.24 <== You are here.
• $114.91, -2%
• $109.41, -6.7%

The 4% rise to serious resistance is a respectable profit for the short-term directional trader, even more so if leverage through options is involved. However, it must be remembered that any upswing must be considered a short-lived until the $122.12 level is decisively pierced.

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Skynet Panic of May 6 Panic Looks Like This Skynet Panic Poisons Technical Tools 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: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple 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.

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