The Respectful Stock Market – A Look at SPY (S&P 500 ETF)

I just wanted to take a quick look at the SPY.  With shallow volume and seemingly limited retail interest, the market is being driven around by algorithmic orders based on technical price levels.  When we break down the chart of movement so far this year, the stock market (we will use SPY, the S&P 500 ETF, as our gauge because it itself is easily accessible) has reacted well along trend lines.  Aggressive buying or selling comes in at the trendlines.

The phenomenon is likely to continue as long as the current market environment stays about the same.   Now that we have had movements which give us short-term trendlines on both the upside and downside, these trendlines can be used to aid us in the future.

These trendlines are not perfect, as hardly anything in the market ever is.  But moving forward the implied levels of the trendlines are likely to exact some impact on the market.  I will not lay out in detail the levels since they will change over time since the lines are sloping, instead I have attached a chart which shows the trend lines and important horizontal support lines.  The two circled price areas are just where aggresive breakouts occured, but which quickly corrected.

SPY (S&P ETF) 15 Min Chart

I have gotten quite a few emails from people over the last few weeks saying the enjoyed the 10 free trading lessons and found them very informative and helpful.  So in that light, I will post the link again.  Enjoy:

~~Get 10 Professional Trading Lessons…. Free! :
http://www.ino.com/info/447/CD3784/&dp=0&l=0&campaignid=6 ~~

Cory Mitchell, CMT

~Know your risks when trading. Please read the Legal Disclaimer page.