As you can see from the weekly SPY chart the market closed higher for the fourth consecutive week. Both the long and intermediate term trends remain up. What is interesting though; is if you look closely at the price bar, the range (high minus low) of the bar is the lowest of the last four weeks and it closed right near the high of 169.07 made in May. Any of you who may be familiar with price patterns will also note that there is a potential double top setting up. If the market closes particularly bearish next week, the probabilities strongly favor that the market will decline further over the intermediate term, with the potential to either test the lower green lines or just remain trading in a range between the lower green lines and the upper green line.
CONCLUSION
In a few recent posts I've had articles regarding hedging. This is a time when I would consider at least putting on a partial hedge. The market has made quite a move and is now challenging a major resistance level at 169.07. If the market were to close very bearishly next week, then I would consider putting on a full hedge. Have a great weekend.
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