Stocks (SPY) were basically flat for the week, but the resilience of bulls cannot be denied. So far any major attempt by the bears to push the prices lower were met with buyers stepping in. SPY features a giant rising wedge as prices rallied off the 52-week lows in February. The difficulty lies in determining exactly where the trading robots are drawing the invisible lines in the sand we call the trend lines.  Read the rest of this post here

​ There is no denying it: a stock rally off the 52-week lows set in January of this year is impressive. SPY keeps pushing higher towards the all-time highs set in July of last year. Stocks were able to clear the strong resistance in the $201-$202 area and close above the gap-down from the beginning of this year. Bulls will argue that these are all positive developments. Read the rest of this post here

Oftentimes when we are trading, we tend to focus on the near-term events and charts and ignore the bigger picture. This week I wanted to start with the very long-term charts and work our way towards the more recent events.
         Being a trend follower, before jumping into any trade I ask myself a very basic question: is the security I am about to trade bullish or bearish? Truly this is sometimes one of the toughest things to do in trading to simply figure out the very basic question: am I going to be buying the security in question or am I going to be selling (shorting) it. I use various methods to determine this including: various trend indicators, market breadth, bellwether stocks, etc. 
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         Stocks ended the week touching the 200-day moving average and pulling back from it. Just above, in the $202-$204 area lies a big gap down from the first trading day of this year. This are should now act as resistance. SPY moved over 11% off the 52-week lows set in February, so it’s a no-brainer that it is now overbought. An overbought condition within a bigger downtrend is a recipe for a push lower. 

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