MIKE PAULENOFF'S ETF TRADING DIARY
For the most part General Electric (GE) and the S&P 500 Depository Receipts (AMEX: SPY) exhibit very similar patterns during the past year or so. However, upon a closer look, we notice that GE actually peaks slightly before the peak in the SPY. After the March rally, GE peaked on May 8, while the SPY peak on June 11. After the July pivot low, GE peak on Aug 7, while the SPY peaked on Aug 25. And last Thursday, Sep 17, both GE and SPY hit new post-March recovery highs. If GE now begins to diverge negatively with a still-buoyant SPY, then perhaps we should expect the SPY to roll over in a significant way at the end of the month (as GE builds a top)? Let’s watch this relationship closely in the days ahead.
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