SPDR S&P 500 (SPY), the State Street Global Advisors Electronically Traded Fund (ETF) that tracks the S&P 500 is the most widely used ETF index. In looking at the last 2 years, we can see the 14 month bullish trendline was broken at $140.06. It now is a potential free fall range to retest Tier 1 and possibly retest Tier 2. So what does this mean?
It means if one has an open position short, you stay short until you see how the SPY trades accordingly around the price of $125.28. If the SPY manages to close below $125.28, then a test of Tier 2 level of $112.02 is probably imminent.
On the opposite end of the spectrum, if one has an open position long, you may want to way the risk/reward ratio. Locking in profits now or maybe taking a small stop loss position would free up cash to position oneself to rebuy at Tier 1.
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