Off the Charts
SPDR S&P 500 (SPY) closed the day down 2.41%, but considering the size of the rally in October, it is nothing to fret about yet for the bulls. In last Thursday's "Off the Charts," we stressed that our fourth Quarter target of 1250-1300 on the S&P 500 had been met two months early and it was time to pare back expectations in the short term. The "meat and potatoes" of the move is over, and by the end of last week, we were coming into heavy resistance zones.
The trend is definitely to the long side after this four-week rally in the market, and now it is time to be patient, but prepared, to buy back at key retracement levels. The gap-up from Thursday was filled today, and the 25% retracement level is not too far away at $123.95, which corresponds to the breakout of the multi-month channel. The 38.2% retracement level is $121.04. In this four-week rally, we have not seen more than a 25% retracement for each dip....643 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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