SPY is leading the ETF's

Discussion in 'ETFs' started by mcichocki, Mar 16, 2008.

  1. ALL the index ETF's are showing similar traits with divergence and volume based support. One set stands out from the others to me though and thats the SPY/ S&P. I think this guy has a chance at leading the way for what's to come in the broad markets.

    Here is my view. I remain bullish mid term and think we could get a large rally before the herd expects it.
    Shorts will probably SCREAM and cover from this next wave also.

    Macd divergence is fairly large and macd histogram divergence is backing us up as well.

    Volume, volume, volume. Folks volume like this down low is bullish, that's not retail, that's big bucks moving around and in this case buying in at the lows. Why do I think it's buying...look at the support level and how it's been fought with big $. Go to the intraday charts and look where the volume is focused at...down low. Pros don't buy high and sell low folks.

    Yes we have a descending triangle, yes we have both volume by price and the top trendline as resistance. BUT the top trendline is pinching off and building pressure like a spring. This spring is getting tight and that's why I feel whichever direction it breaks will have some great momentum behind it. Based on the above backing reasons I have to carry a bullish bias and fade the herd here mentally.

    All that being said, a wise trader may have a bias but rarely trades on it. You should be ready for momentum to either side for the best odds of a winner. If your aggressive you could buy at support down low. The more conservative approach will be to have a buy stop AND sell stop in place just outside the triangle so whichever way it breaks you would capture some of the momentum early and then just trail the stops and manage the trade.

    Good trading :)
  2. PPT
  3. paden


    What's PPT? I feel silly for not knowing.

    My opinion is more that the IWM is leading the way up.
  4. IWM looks about the same to me though it held a bit better on the 1st tankage.

    QQQQ looks good as well, I like how the macd has drifted up instead of whipsawing. That's some smooth divergence on that puppy.
  5. PPT = Plunge Protection Team


    "Plunge Protection Team"
    One theory regarding the Working Group refers to it as the Plunge Protection Team. This theory claims that the Working Group is a scheme to manipulate U.S. stock markets in the event of a market crash by using government funds to buy stocks, or other instruments such as stock index futures.
  6. paden


    Oh crud, I knew that yesterday. I think I am getting old.
  7. Thanks for that info. Never heard of it though I'm a relative noob with less than 2 years experience. "Fresh meat" as some call it. :eek:

    Very interesting read, I wouldn't doubt it totally. That money came from somewhere and the hedge funds probably can't get much for lending right?
  8. Remember the market is one big Ponzi scheme that is becoming unleveraged in a big way. Fortunately we have the FED and friends (GS) to print zillions of $USD to invest in keeping the great Ponzi scheme going up.

    Damn I hope they don't run out of paper, ink or printing machines.


    The paper "dollar bill" is actually called a "Federal Reserve Note". "Federal" refers to the U.S. government. The United States Constitution(the main laws in the country), first said that the government must hold enough gold to redeem (trade for) the paper money it printed. This means that, if needed, paper money could be traded to the government for gold. The government of the United States stopped using this "gold standard" in 1971, which means it no longer needs to have enough gold to trade for paper money.

    Many dollars never enter into the cycle which makes money. They are held in digital accounts and never live in paper form. After printing by the Bureau of Engraving and Printing, the real paper dollars are sold for no more than the cost of the ink and paper.

  9. Nice...we are on the same page there. Most think I'm nuts for saying the USD is more less owned by foreign investors. We are puppets on strings of the worlds TRUE wealthy. Print Print Print all the money till the press burns out.

    How bout fractional lending, thats as bad if not worse than the USD not being backed by anything but hot politician air. Lets have the banks basically print their own money legally and lend 10x what they can back. And they wonder why they lend without really qualifying the person borrowing.

    #10     Mar 16, 2008