Investing
S&P Chart Shows Bulls Taking Pause at Resistance (SPY, MCD, HPQ)
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Stocks gapped down this morning with a weak news flow from Europe and after a poor sales target from McDonald’s Corp. (NYSE: MCD) going into the red, along with higher labor costs versus productivity. Then Hewlett-Packard Co. (NYSE: HPQ) raised guidance. Today we are tracking the daily buy/sell points on the SPDR S&P 500 (NYSEMKT: SPY) as the most liquid equity ETF on the market to help traders and investors avoid buying at the wrong time or shorting just before a intraday rally. If you go back in time over the past three to four months, yesterday was a peak at serious chart resistance.
Erlanger Value Lines are designed to identify key levels for the intraday trader or for anyone trying to establish a new position during trading hours. The Value Lines fall into three categories: Support and Resistance, Extreme values and Range values. From a practical point of view, the Value Lines can act as targets and triggers for short-term trades.
Some think it is uncanny how these levels stop or turn back short-term price swings. We do not. Why? Because both high frequency traders and program trades have built these levels into their models that cause them to gravitate to resistance, pivot or support along with range values like the 5 and 60 minute ranges. We have compiled here the daily chart, the daily analysis for traders to use, and then we have followed it with a general guideline after the daily commentary along with a sample chart.
For Wednesday’s S&P 500 SPDR chart analysis, Phil Erlanger said, “Tuesday saw the SPY rip higher on the open above resistance. We traded above resistance on SPY but again faded a bit into the close, still holding well above resistance. Today we are trading pivot to support on SPY. Watch for a move above $140.42 to add new buys. One could try to short a break of $139.93 although it seems this may be a tough trading and if it does break timing tools should be used to lock in gains before they evaporate.”
The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.
General Notes:
August 8, 2012
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