SPY Week #6
I am searching with this market the way it is going if it is time for me to get back into the SPY yet. I made good money in July but I have been waiting for an entry point to get back in. I have decided it is still not time to get back into the market I will wait. These are my reasons for waiting even though things really look bullish.
First let’s look at a weekly chart.
On this weekly chart, we continue to show a bullish sentiment, but we have slowed down a bit. The candlesticks are looking more and more like they are getting ready to touch the upper Bollinger Bands. After this week is over, we will see an even greater weakening of the bullish trend I am afraid. This does not mean that things are going to turn bearish on us. But it does show me signs of consolidating coming back in soon. So I am not getting any indication that I should get in right now. And there are other indicators of a slow down I progress that concerns me. Let’s look at the weekly volume.
This isn’t hard. Decreasing volume on an upward trend is showing signs that buyers are becoming less and less interested in putting money into the SPY. Of the last 20 weeks, only 6 were seller’s weeks. But the volume is steadily going down. This shows me that sellers are going to be getting more ambitious and people will be taking profits here pretty soon.
So between the two, the indicators are telling me it is time to wait.
Now let’s look at the daily chart. The breakout today is a significant point. It was back in November of 2008 that it last touched this point. This is the last point until it has a huge break up.
For this reason I am thinking with the weekly signs that this might be the real testing point of the SPY. If this is the case then it is not a wise point to get in.
Short term, all the daily indicators look strong and bullish. The RSI is over sold but for all purposes it looks strong also.
Possibly, the combination of the SPY touching the upper Bollinger Band soon and the RSI continuing to be over sold may give us that reversal that appears to be coming. As to when we don’t know yet, but it is better to wait to get in. Even if we are looking at making money on the down side of the SPY it is still too soon to get in.