Tuesday, May 5, 2009

SPY drifting with pullback due

SPY is due for a technical pullback based on several factors, especially if it breaks below pivot of 90.07 with any volume.

1. Lower highs and lower lows
2. Bearish MACD on short term indicators
3. Descending triangle or pennant(?)
4. Complacency borne of bullish sentiment shift.

The problem with this thesis is the low volume and the massive momentum from yesterday.  S1 is 89.17 and it would take an act God or Osama bin laden to get us there today, but 89.50 is not out of the question.  

Doubtful that short sellers will take on this beast, but perhaps profit-taking today or tomorrow before the NFP and Stress Test release.

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