S&P Chart Failure Creating Opportunity

The market is looking for direction and we are still on the heels of a rally that has gone for five consecutive weeks now.  This makes those charts more important than ever. Today we are tracking the daily buy/sell points on the SPDR S&P 500 (NYSEMKT: SPY) as the most liquid equity ETF on the market to help traders and investors avoid buying at the wrong time or shorting just before a intraday rally.

Webinar Registration: Do intraday market swings caused by high frequency and program traders drive you crazy? What if you could know how they are going to trade each and every day? Now you can if you follow the Erlanger Value Lines as they were created on the floor of the NYSE. High Frequency traders came from the floor. Watch our free webinar this Thursday at 4:30 p.m. EDT and you will never trade the same way again. Register here.

For Tuesday's S&P 500 SPDR chart analysis, Phil Erlanger said, "Monday we were trading pivot to resistance when we gave our update. Look to use yesterday's 2 hour high to get long above $140.89 or go short a break of pivot at $140.51. This worked out well as SPY traded to a low of $140.04. We recommended to use triggers to manage the trade. Our trigger kicked us out of the short at $140.23 so $0.27 were made. Today we traded above resistance but then failed at it. So now we are trading resistance to pivot. Use a break of pivot at $140.55 to go short or a move back above resistance to go long at $141.06."  

The Erlanger Value Lines can be accessed via Erlanger Chart Room. The daily service gives investors and traders access to critical buy/sell levels on the S&P 500, NASDAQ, DJIA, Oil Services Index, gold & silver, any index or equity, as well as analyzing short-squeeze opportunities and more. For more information we direct you to sign up here.

General Notes:

  • If price moves above the red Resistance value line, then the intraday bias turns positive:
  • A positive bias reflects times when only long trades are considered.
  • If price moves below the green Support value line, then the intraday bias turns negative:
  • A negative bias reflects times when only short trades are considered.
  • If price remains within the green Support and red Resistance value lines, then the bias is neutral. The pivot line can be used to establish an intra Value Lines bias. Pivot to Support is negative and Pivot to Resistance is positive.
  • If price remains within the first hour high and low value lines, then the bias can also be viewed as neutral. This is especially true if the first hour range is inside the range set by the support and resistance value lines:
  • A neutral bias reflects times when both long and short trades may be considered or (depending on the traders style) a time for no trading. All Erlanger Value Lines can be used as short-term target levels. This is especially true if a few are clustered together.

August 14, 2012

Filed under: 24/7 Wall St. Wire, Active Trader, Charts, Technical Analysis Tagged: SPY
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