See for yourself below:
There was a strong rally in the last week of June 2011 and the weekly bar ended almost identical to what we have last week. Did you see how the price actions consolidated mostly in July and then rolled off the hill in August 2011? (see the price action inside the red rectangular box on the left)
In order to avoid a repeat of last July & August, we need to see price action takes out the 61.8% retracement of Point (3) and Point (4) and turn the retracement into a support instead of bumping against it as resistance.
Perhaps, this year being the Presidential election year will turn the tide to the upside instead of a replay of 2011?
Stay tune and watch out for price action. Last Friday, I increased my equity to 29% and cash @ 71%. I will add more equity if price action (SPY) can take out the $136.45 and stay above the retracement I mentioned above. On the other hand, if price action is having a hard time bumping against the resistance, I will be unloading my equity back to cash to play safe.
Good Hunting!
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