Bears took control this week and made a lot of damage to the bull case by breaking below the daily trend line, so I am looking for the move down to eventually reach at least the 174-175 area but if SPY breaks the weekly trend line it can go all the way to the 152-158 area. There is a very minor positive divergence on the daily but this may only indicate a local bounce if at all, it is a long way back to the trend line, but bulls should have some glimmer of hope.
On the short term, 3 attempts to break 177.76 failed and bulls held the line so we may be looking at a double bottom and a bounce to one of the short term trend lines, before another push down. On the other hand we may see this push down first creating a positive divergence and long signals, which may lead to a more significant move upwards and dare I say a Santa rally.
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Battle Plan for the 12-16-2013
Neutral waiting for a signal
* Stop loss lines should be triggered if there is an interval close above them (i.e. 60 min or 120 min ), they are published in the daily blog and updated during trading hours on twitter.
* Take profit lines should be triggered immediately when crossed, they are usually issued during the trading day on twitter.
* Entry signals should be triggered when crossed, but take into account that until there is a confirmation (i.e. close of the interval across the entry signal) , the signal can become a reversal signal.
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