A look on the SPY Chart

A look at the weekly chart of SPY will disclose an interesting extended run up into the 136 level. Now what is interesting to note is that the market is way, way, way over extended at the top, at the peak.

Now I’m telling you, this is very, very dangerous. I would expect a bit of a pullback somewhere between the 128-130 levels if it continues to run this trajectory it would sure to affect your trading and investing options.

Volume of Trading

A close inspection of the volume will reveal a tapering down trend as the market goes up, the volume goes down; they are somewhat inversely proportional, right? That’s not an overall good sign for the overall bullishness of the market.

Into the Stochastic Chart

Immediately, we can see on the stochastic chart that the overall points on the SPY are well into the 96+ level. By comparing and adding up the points on the SPY chart, against the resistance level and finally the stochastic level-

plus factoring in the overextended run of the market and the volume’s dropping down trend, and the average price point of 96, to me, this whole thing looks like it wants to start going down and moving down.

Daily Chart

The chart indicates an overall slow crawl up into the high side of the 136 level. It hasn’t had any strong movement whatsoever. The overall movement that we see is actually weak. It is a slow crawl upwards, even downwards at times.

Unlike on the early part of the chart where the movements are big, going up, then going down and back up again. The slow crawl up is actually very, very dangerous in the market right now. It is indicative of a very weak market at this time.

Variables to Ponder Upon

Looking at the stochastic chart, we see that the line tops on the 92+ level on two points and that could be pinned down as the market continues to climb higher. Looking at the 50 moving average volume, we can see that it tapered down, now, that tells you something right?

We’re over extended; we are slowly crawling up, not much massive power behind it and then the volume is pointing down tremendously, there’s a huge dropping down actually, the stochastic’ pinned, that, to me, indicates a very weak market we have right now.

Hourly chart

Switching to an Hourly chart, and drawing a channel on the points that matter, we can formulate where the market would probably fall, along the 132-133 level. Even there, we can form a channel on the downside. So from this, we can see the market getting weaker.

In Closing

I don’t really believe we’ll likely to see a lot more upside anytime soon and the reason for this is that because of the divergence along the stochastic and the indicators. As always, keep an eye out for that and be very careful on this market.

 

 

 

 

 

Tags: Market, Market Stock SPF "S&P 500" "Stock Market", price, SPY, volume

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