February 7, 2011

  • SPY Weekly chart shown with a resistance line in weekly chart.
  • The resistance area is between 131 - 132. 
  • But the bulls are getting good support from 20 and 50 day moving average. Price is trading well above 20 DMA which has a nice upward slope suggesting the strong up trend. Price falling below this would indicate some weakness.
  • Next chart will give some interest for bears as it shows negative divergence between price and force index. This has been diverging for quite sometime now without any major gains for bears. So one can expect a major correction soon. But Price has to confirm before negative divergence can take affect.


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"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore