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Saturday, August 15, 2009

Reversal Signals?

Looking at the 60 minute charts on the SPY, there are a few signs of a reversal that may be coming.

First of all, there is a Head and Shoulders topping pattern. There is also a potential Exhaustion Gap and a Descending Triangle. We have also had no pull back at all since this recent wave up began, and with minor wave (a) potentially topping at 102.03, we can start giving targets for the minor wave (b) pullback.

There is some real nice support for SPY around 96.30 and 97. Which is in line with 2 gap fills(98.82 and 97.65), the 38.2% Fib retracement of the recent rally and some decent horizontal support, not to mention, our breakout point on SPY was 96.11, which was our high on June 11, 2009. I don't see any pullback breaking that level on SPY. There is just way too much bullishness out there, and the so called 'dip buyers' will just keep popping up at every major support level. But let's not get too ahead of ourselves. No significant pullback will occur unless we break 99.46 on SPY with some decent volume. The sellers just seem to give up when we get to that level, and the buyers come in like there is no tomorrow.

A break above the current highs of 102.03 will nullify the current count, which could be possible.

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