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[...] December 21 and showed the first sign of weakness during the past few days after the SPY closed its unfilled gap since July 28, 2011. As previously announced, one level at the 129.50 area did act as [...]
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S&P 500 Trend Update (Week 4)
Last week merely extended the uptrend channel we are currently in, but it is noteworthy that the SPY has finally been able to fill the gap open since July 28, 2011 (shortly before the massive sell-off last summer).
Imminent danger is not seen as of Friday’s closing, but the current formation could pose an opportunity for bears to profit from a minor reaction.
Support is currently seen at 129.50 whereas a more significant support zone is at around 126.50 according to historical price action in the daily time frame. Should these areas break, the market might be in for more trouble. Nothing is signaling this yet, so the trend trader is better advised to use a bounce off the aforementioned barriers as an opportunity to commit to new long positions.
The primary direction is still to the upside. Reactions are therefore most likely short-lived, so betting on them need to be undertaken with greater attention.