Jan 17

S&P 500 Should Press Lower

by Mike Paulenoff, Wed January 17th, 2007

Although the S&P 500 SPDRs (SPY) did not put in a key downside reversal session, which means that today's weakness off of a new high is likely to have near-term trend-changing implications, I exited my long position nonetheless. That was largely because today represented the third consecutive session that the SPY bumped up against the upper Bollinger Band, which usually resolves itself in reaction weakness -- towards a test of the mid-point, 20-day moving average (now at 141.88). We should not be surprised to see the SPY press lower during the next session or so, towards the mid-point of its two standard deviation range -- at 141.88.
Chart

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!