SPY - Commentary 16 Jul 2010

The DOW, Nasdaq Composite and the S&P500 indices are all showing lower highs and lower lows since April 2010 highs. All three are showing a Head and Shoulder formation.

Since I like to play SPY (S&P500 ETF), I would like to discuss more of this. The major indices have somewhat similar pattern as SPY.

• Interestingly, SPY bounced off the 38.2% correction level (taken from the March 2009 Low to the April 2010 High) in its attempts to rally from that level.
• However, the rally tapered off and formed a new lower High last week.
• A Head and Shoulder formation is also formed. If this HnS formation run its full course, then the target would around $87.00, which also happened to be around the 68.2% Fibonacci Level. That is a massive $20 or so off its current price.

I have been shorting SPY on the rallies.

For the coming week, I am also monitoring the earnings results for GS and AAPL on Tuesday. They performance is likely to be market moving.

Cheers !

PersianCat