SPY - Bullish or Bearish ??
This is a WEEKLY chart of the SPY. All moving averages are also weekly. These are longer term signals I am pointing out.
I want to focus on a few things on this chart.
1) The broken uptrend line
2) The new horizontal range
3) The last two weeks and a Monday
1 - The Broken Uptrend Line
There is a green uptrend line that started back in Oct of 2014 and was broken in June of 2015. You will notice that the week of June 8 was the first week the SPY closed below the uptrend line. The closing price for the week was $210.01. What is the rule when an uptrend line is broken? It usually means there could be some downside to come. The longer a "stock" stays below the broken downtrend line, the higher the likelihood it will remain under the downtrend line and that lower prices are in its future.
2 - The New Horizontal Range
The SPY has changed its complexion. It used to mimic a rock climber traversing a mountain. Now it resembles a person walking on a plateau. The question is what will come next? Will this person fall off the edge of the plateau or will the rock climber begin up another mountain. Believe me, I have tried everything to see farther to the right. To see what the next candles look like. "C'mon", I have yelled to my monitor, "Show me more!". But no luck.
As I see it, the bottom of this new range is about 204.50ish and the top of the range is about 212ish. The bottom of the range has held pretty well but the top of the range is not so cut & dry. There have been a couple times where it looked like the SPY would break out of the channel to the upside. But very quickly is just sank back down into the channel again. The SPY is range bound. And it will be until the SPY breaks out of the range one way or the other.
3- The Last Two Weeks and a Monday
Please take a look at the week of July 27 and August 3. I want you to notice that The week of August 3 is an inside week. Meaning the week of August 3rd has a higher low but also a lower high than the week of July 27. You should also notice that today (Monday 8/10) continues the pattern and is also an "inside week". Why is inside week in quotations? Because Monday alone does not make a week. We shouldn't really talk about another inside week when only Monday has passed. Now if Friday comes along and this week has a higher low but a lower high than last week we can lose the quotes and just call this week another inside week. But we will have to wait a few more days for that.
So what is the significance of an Inside Candle anyway? The rule goes like this. If the candle after the inside candle gets higher than the inside candle, then we could see higher prices. If the candle after the inside candle gets lower than the inside candle, then we could see lower prices. So the chart may be telling us (this week) what is coming next...
The high of the week of August 3 is $211.31 and the low is $206.87. Keep those two numbers handy and remember, above $211.31 may point to higher prices while below $206.87 may point to lower prices. There are many other things to consider along the way and many reasons why this rule may not be telling you what it seems. No rule of investing is 100%. But the Inside Candle rule happens often and has a pretty good track record.
I will be keeping an eye on this weekly chart even though I typically trade based on daily charts. I hope you too will remember to look at the longer term picture of a stock that you are trading or investing in. For me, it is nice to step back and look at the longer term trends.
One more thing. The answer to the question in the title of this idea... I just don't know :{ It could go either way. The candle after the inside candle is a hint. You will have to take it from there.
Trade What You See... Not What You Think, Or Feel, Or Hope, Or ...
The Trend Id Your Friend Until It's Not
Limit Risk & Protect Your Profits
I want to focus on a few things on this chart.
1) The broken uptrend line
2) The new horizontal range
3) The last two weeks and a Monday
1 - The Broken Uptrend Line
There is a green uptrend line that started back in Oct of 2014 and was broken in June of 2015. You will notice that the week of June 8 was the first week the SPY closed below the uptrend line. The closing price for the week was $210.01. What is the rule when an uptrend line is broken? It usually means there could be some downside to come. The longer a "stock" stays below the broken downtrend line, the higher the likelihood it will remain under the downtrend line and that lower prices are in its future.
2 - The New Horizontal Range
The SPY has changed its complexion. It used to mimic a rock climber traversing a mountain. Now it resembles a person walking on a plateau. The question is what will come next? Will this person fall off the edge of the plateau or will the rock climber begin up another mountain. Believe me, I have tried everything to see farther to the right. To see what the next candles look like. "C'mon", I have yelled to my monitor, "Show me more!". But no luck.
As I see it, the bottom of this new range is about 204.50ish and the top of the range is about 212ish. The bottom of the range has held pretty well but the top of the range is not so cut & dry. There have been a couple times where it looked like the SPY would break out of the channel to the upside. But very quickly is just sank back down into the channel again. The SPY is range bound. And it will be until the SPY breaks out of the range one way or the other.
3- The Last Two Weeks and a Monday
Please take a look at the week of July 27 and August 3. I want you to notice that The week of August 3 is an inside week. Meaning the week of August 3rd has a higher low but also a lower high than the week of July 27. You should also notice that today (Monday 8/10) continues the pattern and is also an "inside week". Why is inside week in quotations? Because Monday alone does not make a week. We shouldn't really talk about another inside week when only Monday has passed. Now if Friday comes along and this week has a higher low but a lower high than last week we can lose the quotes and just call this week another inside week. But we will have to wait a few more days for that.
So what is the significance of an Inside Candle anyway? The rule goes like this. If the candle after the inside candle gets higher than the inside candle, then we could see higher prices. If the candle after the inside candle gets lower than the inside candle, then we could see lower prices. So the chart may be telling us (this week) what is coming next...
The high of the week of August 3 is $211.31 and the low is $206.87. Keep those two numbers handy and remember, above $211.31 may point to higher prices while below $206.87 may point to lower prices. There are many other things to consider along the way and many reasons why this rule may not be telling you what it seems. No rule of investing is 100%. But the Inside Candle rule happens often and has a pretty good track record.
I will be keeping an eye on this weekly chart even though I typically trade based on daily charts. I hope you too will remember to look at the longer term picture of a stock that you are trading or investing in. For me, it is nice to step back and look at the longer term trends.
One more thing. The answer to the question in the title of this idea... I just don't know :{ It could go either way. The candle after the inside candle is a hint. You will have to take it from there.
Trade What You See... Not What You Think, Or Feel, Or Hope, Or ...
The Trend Id Your Friend Until It's Not
Limit Risk & Protect Your Profits
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