Sunday, January 16, 2011

New 8 to 10 new highs developing on SPX and SPY

After ten weeks this pattern will be back again in play, this week, *IF* we make a new high, it will be the 8th consecutive new high, we might still see the 9th and 10th on the coming weeks, or NOT, because this is how this pattern works it may stop making new highs on ANY of those 3 next new high bars, so what we need is to see if there is any confluence, some important resistance, when it makes new highs this week, how high can it go?

Will it cut the 1300 psychological barrier like a hot knife on butter and just keep going up or will we see some kind of pullback when/if it tests that important area from 1300 to 1307 (CASH)?

Click on the chart to see it bigger.

SP500 Weekly Chart

The same pattern is in play on SPY, let's see what "the boyz" want to do when we make this new high, I intend to start building a short position this week, but of course we might see it going much higher, remember, in this business, anything is possible.

Have a great week every one!

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