SPY vs. SPY

In December, I put out a year-end target of 1610 for the S&P 500 based on the monthly chart. Now I look at the daily chart and see this rounding pattern only to realize the target on this is $160 if the SPDR S&P 500 (SPY) closes at new highs today. Still, we find bearish divergences in the momentum indicators and still the bulls don't care. Buy. Buy. Buy. It is possible we have a short-term double top here, so I am long a small amount of SPY April 12 $157.50 puts, but I won't give them much room. If it closes at new highs and doesn't push lower in the morning or fade a gap quickly, then I'll cut this trade loose for a loss quickly.

SPDR S&P 500 (SPY) -- Daily Source: StockCharts.com View Chart » View in New Window » SPDR S&P 500 (SPY) -- Monthly Source: StockCharts.com View Chart » View in New Window »

The monthly chart for the SPY has been strong. There is a very large rising wedge pattern, which can often be bearish; however, there has been no price trigger yet. Furthermore, the Relative Strength Index has move well with price and stochastics well into overbought territory, but it has demonstrated it can get there and stay there for some period without a drag on price....184 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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