The S&P 500 ETF ,” that uses the symbol
“SPY,” has been influenced by the stock market this week. Its stock price
stands at $114.82 As we learn in MSN Money Snaphot
they write this about the Fund: “The investment seeks to correspond generally
to the price and yield performance, before fees and expenses, of
the S&P 500 Index. SPDR Trust is an exchange-traded fund that holds all of the S&P 500 Index stocks. It is comprised of undivided ownership interests called SPDRs. The fund issues and redeems SPDRs only in multiples of 50,000 SPDRs in exchange for S&P 500 Index stocks and cash."
From a weekly chart, we can definitely see that the bearish movement that we were experiencing for 12 weeks has been broken and we are on a bullish climb. Now, whether this is a continued climb long term, that we have yet to see. None of our Indicators are giving us a long term hint as to where we are going and therefore we will hold on to the long trading range we have been writing about for some time.
So now we are gaining confidence in the market.The Economic Cycle Research Institute (ECRI), a New York-based independent forecasting group, released their latest readings for their proprietary Weekly Leading Index (WLI) this morning.
For the week ending September 17, 2010
- WLI is 122.2, down from the prior week's reading of 122.6.
- The lowest reading for WLI this year was 120.4 for the week ending July 16.
- WLI growth moved higher to minus 8.7% from a revised minus 9.3% a week ago.
- The last positive reading for WLI growth was for the week ending May 28, 2010 when it stood at positive 0.1%.
Commenting on the data, Lakshman Achuthan, managing director at ECRI said,
After a brief plunge in the late spring, the WLI has been fairly stable throughout the summer and into September, suggesting that it is still premature to predict a new recession.
So it appears we have the momentum on our side if we are bullish (at the present). 99 stocks on the S&P 500 hit 52 week highs this week, that shows momentum! We are rallying quite a bit lately without any significant pullbacks! So what does this mean?Jerry Slusiewicz sums up the positive trend this way: In the span of a few weeks, a new consensus view has emerged that the double-dip scare of July/August has diminished. New bullish technical patterns have emerged such as a break above 1132 on the S&P 500 and 2342 on the NASDAQ. The charts show a pattern of higher lows and higher highs since the July bottom. The markets have also crossed above the neckline of an inverse head and shoulders pattern which when measured properly should run the markets back to the old highs of this year. The technical picture certainly has a lot more positive aspects that didn’t exist just a few short weeks ago. There is now a shift in trend that could really make this market go.
So yes we are turning bullish but still be cautious in your trading. We need a pull back eventually, so don;t get caught in a bullish run without knowing this, or at least keeping it in mind. Gold is also hitting record highs and that shows a lot of fear still in the markets. Just be cautious in your trades and remember that we are at a turning point here. We will either go long or pull back...watch!