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

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

SPDR S&P 500 closed up 0.775 at 210.435. Volume was 85% below average (consolidating) and Bollinger Bands were 17% wider than normal.

Open High Low Close Volume___
209.870 210.650 209.870 210.435 14,706,515

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

Moving Averages: 10-period 50-period 200-period
Close: 207.13 207.74 202.52
Volatility: 32 17 19
Volume: 147,348,448 102,174,784 120,535,520

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.

Summary

SPDR S&P 500 gapped up today (bullish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevant for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
SPDR S&P 500 is currently 3.9% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of SPY at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on SPY and have had this outlook for the last 8 periods.

Momentum

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 83.7525.  This is an overbought reading.  However, a signal is not generated until the Oscillator crosses below 80  The last signal was a  buy 5 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 55.49.  This is not a topping or bottoming area.    A buy or sell signal is generated when the RSI moves out of an overbought/oversold area.  The last signal was a buy 116 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 89.  This is not a topping or bottoming area.  The last signal was a buy 5 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  3 period(s) ago.

 

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Shayne Heffernan Funds Manager at HEFFX 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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