SPY Chart – April 4, 2008

I’m charting the S&P 500 SPDR (SPY) this weekend. Like the rest of the large “spiders” it’s still in a trading range that started in January. For the past four days it touched top side of the relatively short upward trend line that started at the beginning of March a month ago, but couldn’t break through. I like seeing this uptrend brewing, but until it gets above the trading range that tops out around 140, I won’t feel too inclined to be a big buyer. The next dip will be interesting to watch to see if it goes all the way down to 130 or just to the latest uptrend which could be at 135 by then.

The number options I’m short are heavily weighted towards the April expiration aside from the two sets of May naked puts I sold in the second half of this week. I still have a bearish sentiment on my home page and have been considering a change and just can’t bring myself to change it until we break through that ceiling. Of course I won’t be calling the bottom. I’ll be saying our upside potential is finally outweighing the short-term downside potential. With earnings season beginning, I’m cautious. It doesn’t take an experienced investor to predict it will be a rocky road for the next month. Getting above 140 just turns that bias north instead of sideways or down.

More on this topic (What's this?)

Fasten Your Seat Belts for a Bumpy Ride (Money Morning, 1/2/12)

MarketClub Timing Portfolio (Scott's Investments, 1/26/12)

4 Short Opportunities To Consider This Year (Investment Underground » Page n..., 1/27/12)

Monthly Membership Option is Now Available (Value Stock Guide, 1/14/12)

Read more on SPDR S&P 500 ETF, Wharf (HLDGS) at Wikinvest

« « Sold 8 NVDA Covered Calls - | - My Trader’s Journal is One Year Old Today » »

Comments (3)

* If you like this post, then consider subscribing to the Full RSS feed or email updates.

DISCLAIMER: While I am a Registered Investment Advisor Representative, the information contained within this site does not constitue personalized investment advice. This material is meant as entertainment and is only a view into how I invest my own account, but not necessarily how you should invest your own funds. Trade using your own research at your own risk. This is impersonal investment advice which means the material written here, in email exchanges, on Twitter and/or other social networking sites do not purport to meet the objectives or needs of specific individuals or accounts.

3 Comments

Comment by Kadena

look at the williams % and what happened to prices last few times it was overbought.
Comment by mule65

Also showing overbought on low volume and oversold on heavier volume. Still signifying sell-the-peak vs buy-the-dip, IMHO.
Comment by Alex Fotopoulos

Yep, I think both of you are on the right page. %R doesn’t matter as much until it breaks out below the top 20% range (or above the bottom 20% range), but that said Mule makes a great point on volume – this whole run up has been on lighter than normal volume.