Of course, all gaps are significant, and we have had a few recently. Analyzing the weekly and hourly charts shows some interesting characteristics of this move.
I’ve mentioned a few times that in the short term, if the SPY can get over the 121 level, it would signal a new uptrend and new highs. It looks like that’s exactly what happened.
The market has moved comfortably over 121, the 23MA has crossed over the 50MA on the hourly, and the next key resistance short term is at 124.
More importantly, in my opinion, is the weekly chart:
The pullback of the previous couple weeks brought the SPY back to the 200MA of the weekly, and the strong move last week bounced it off that level on strong volume. This is a key area here for couple different reasons. Not only is the 200MA in this area, but the 61.8% Fib retracement level of the high 2007 to low 2009 bear market is around 123, and the market had struggled with this area earlier this year.
This gap up (should it hold) will put some distance between the SPY and these key resistance areas (which will now become support). I believe this uptrend will continue unless some unforeseen events occur and drop the market back below these levels in the near term.
In any event, ignore the noise, and follow the charts. There are lots of opportunities out there.
Trade well.
Posts
No comments:
Post a Comment