Stock Market Technical Analysis On SPY For June 28 2010

http://www.guerillastocktrading.com Here we go for some weekend technical analysis on the SPDR S&P 500 ETF (SPY) for stock trading on Monday, 06-28-2010.

The reason we examine the weekly chart in the beginning, even if we trade in a much shorter time frame is that first we have to find out the trend.

How many times have you been studying a time frame and then you take an entry off a support or resistance line only to be flabbergasted by a move you didn't think was coming? That happens because the price moves outside the time frame you were studying.

To steer clear of being blindsided like this, you must study a higher time frame in an attempt to prove the trend. Specifically that is why we look at the weekly stock chart initially.

The weekly stock chart of SPY finished the week with a Bearish Engulfing candlestick. The MACD remains negative on the weekly stock chart. We too see a Bearish Head and Shoulders top being created and we are just on top of closing the neckline on behalf of the right shoulder.

Going in closer on the daily chart, we find out that the neckline closes at roughly $104.80 . We as well have the MACD crossing under the 0 line.

In half a shake the stock trader thobbit60 writes, "I see eye to eye with your bearish analysis. Hence why not short SPY?" Refuse the impulse to short the SPDR S&P 500 ETF (SPY) until the neckline is closed on the Bearish Head and Shoulders top. It also is prudent to get at the very least one day of confirmation underneath the neckline on rising volume. I appreciate how attractive it is to leap early however you have to try and be patient.

The hourly chart reveals the hasty transformation in institutional investor emotion starting last Monday, 06-21-2010. Why? What happened?

To respond to that inquiry you must return back to the gap on 06-10-2010. That bullish gap up happened as the consequence of weekly jobless claims falling by the biggest amount in over a year. Therefore the mainstream of market participants held that the economy was still gradually recovering. By 06-21-2010 this all changed with the news flash that housing construction is officially in a double dip.

As the week went on, new bad housing news came by way of the plummet in home sales. Then GDP was revised downward. Being that housing is such a key component of our economy making up 70% of GDP, stock traders realized that a double dip in the housing market can very well forecast a double dip recession.

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Education

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• s&p500
• technicalanalysis
• s&p500spdr

[uhateusaFU]

Thanks, I believe the whole economy is going to down the crapper.