Tuesday, January 22, 2008

Trade Update: IVV SPY

As you can see in the 15 minute chart (Link 1) the market gaped down on the open and crashed to 126.00 before recovering and filling the gap all day long. For the day the SPY/IVV ended down by about 1%. The recovery I believe was only the shorts in a scramble to protect themselves from the market manipulation of the FED. I do not think there will be follow through. You can see we are clearly in a down trend below the 200 dma with the 20 dma and 50 dma both trending down (link 2). There is no reason to get bullish yet. Probably we will see the bears reengage this market and test the lows of 126 again in the next few trading days. If that happens and the market holds the 126 zone in may recover back to 130 and thereby form a W pattern. That would be bullish short term. That will give us a chance to exit the short on SPY and ride the IVV back up. If 126 does not hold we have to go back two years to find support in the 121-122 zone (Link 3), in which case we will add to the SPY short.
to recap I do not think this market is going to stage a turn around, but what I think does not matter, the market is my master.

Link 1:http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=spy&sid=0&o_symb=spy&freq=7&time=18&x=29&y=14

Link 2:http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spy&time=8&freq=1


Link 3:http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=spy&sid=9864&o_symb=spy&freq=1&time=9

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