SPY has been on a classic trend line for several months. My observation is that the stock market is no respect of charts, but lots of people follow the charts and trade accordingly--so I use charts as a psychological predictor. According to the trend line, SPY should bottom around 105.5 in this current cycle and then start making its way back up again. I plan to jump into SPY at around that point.
Click chart to enlarge.
2 comments:
New to the site, its pretty nice. Why do you use the the ETF's instead of the major indexes? One thing I think you might find interesting is tracking the relationship of the VIX, VXN, VXO, and RVX. Anyway, great work!
Hi Mark, I don't follow the Dow because it is so narrow, and SPY tracks the S&P 500. Got burned pretty good in the 2000 crash so that is probably why I don't follow the NASDAQ. Since I trade primarily in these ETFs as opposed to individual stocks it seems simpler to just watch the ETFs. Perhaps I don't understand your question.
I haven't spent hardly any time on the other volatility indexes. I will take a closer look. I don't view any of them as predictive, but I think they are very interesting measures of human psychology.
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