I detailed the unfavorable risk/reward profile for allocating fresh capital on the long side to the OIH yesterday based on that monthly. Today, let’s take a look at the monthly SPY. As you can see on my annotated chart below, we have run straight up into a key reference zone–the general $131 area–after printing five consecutive green monthly candles. Moreover, we continue to reside outside of the upper monthly Bollinger Band. Accordingly, extra attention should be paid to position sizing, protective stop losses and timeframe now more than ever with respect to any longs.
___________
Werd!
Indeud! great post
Nice.
gah, i think i just farted something awful
Certainly!
hey chess, doesn’t resistance erode over time? ie. don’t u think by now people that were holding in 07 and 08 would have sold already?
Not on the first touch of that level. Note how that concept held true in the 2001 to 2006 comparison on chart above.
yep good point. no worries though, they will just gap over that area over the wknd. problem solved! 🙂
I would not be surprised if we push down over one or two days to the 20 EMA 128.50 on the $SPY before it pauses. The fact that the SPY closed outside the Bollinger Band … the last time it did that was a couple of days before it started a 3-week pullback in November 2010… We r getting close to a pullback ….