SPDR S&P 500 ETF Trust (NYSEARCA:SPY) Outlook

Posted by: : Shayne HeffernanPosted on: November 18, 2014 SPDR S&P 500 ETF Trust (NYSEARCA:SPY) Outlook

SPDR S&P 500 ETF Trust (NYSEARCA:SPY) Outlook

SPDR S&P 500 ETF Trust (NYSEARCA:SPY) closed up 0.730 at 205.100. Volume was 84% below average (consolidating) and Bollinger Bands were 37% wider than normal.

Open High Low Close Volume___
204.440 205.300 204.440 205.100 17,645,652

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 203.88 197.65 192.74
Volatility: 4 16 13
Volume: 76,313,816 130,596,512 105,267,104

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

SPDR S&P 500 ETF Trust (NYSEARCA:SPY) closed below the upper band by 21.2%.

Bollinger Bands are 61.00% wider than normal. The large width of the bands suggest high volatility as compared to SPDR S&P 500’s normal range. Therefore, the probability of volatility decreasing and prices entering (or remaining in) a trading range has increased for the near-term. The bands have been in this wide range for 28 period(s). The probability of prices consolidating into a less volatile trading range increases the longer the bands remain in this wide range.

A white body occurred (because prices closed higher than they opened).

During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Summary

SPDR S&P 500 is currently 6.4% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect very strong flows of volume into SPY (bullish). Our trend forecasting oscillators are currently bullish on SPY and have had this outlook for the last 15 periods. Our momentum oscillator is currently indicating that SPY is currently in an overbought condition.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 76.8946. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 70.71. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 22 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 105.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 20 period(s) ago.

SPDR Trust, Series 1 (the Trust) is a unit investment trust. The Trust is an exchange-traded fund created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks, in substantially the same weighting, which comprise the Standard & Poor’s 500 Composite Price Index (the S&P Index). Each unit of fractional undivided interest in the Trust is referred to as a Standard & Poor’s Depositary Receipt (SPDR).

The Trust utilizes a full replication approach. With this approach, all 500 securities of the Index are owned by the Trust in their approximate market capitalization weight.

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Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
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