Chart Courtesy of StockCharts.com
Chart Courtesy of StockCharts.com
  1. We finally see volume coming in on Thursday and Friday as the market moves higher, this is bullish.
  2. Bullish Slow Stochastics Crossover.
  3. Bullish to have a declining ATR.
  4. Bullish MACD.
  5. Bullish to be over the 10 day EMA, but price needs to consolidate here as price is extended from the 10-day EMA.
  6. Bullish $SPY breakout over the 200-day SMA. It would be normal to return to the 200-day SMA next week before and if we head higher.
  7. RSI bullish at 65.76, but we need a trading range over the 200-day SMA to consolidate overbought levels short term.
  8. Central banks continue to do whatever it takes to keep the bull party going. The ECB rollercoaster ride was won by the bulls.
  9. Historically buying over the 200-day is a trend following signal that can lead to big wins. A break over the 200-day doesn’t always proceed a new uptrend, but ALL bull markets must first break over the 200-day BEFORE a new uptrend begins. It’s a useful long term trend filter to get you out of bear markets and corrections when it’s lost, and get you in at the start of new uptrend when it’s overtaken.
  10. If the 200-day is lost, MACD crosses back over bearish, or the Slow Stochastics crosses back over bearish crossover, then the bears have regained control.

Full disclosure: I am currently long $SPY and $SPXL in two of my systems. A close under the 200-day SMA will stop me out of $SPY. If we continue to trade above this key level, I will be holding my long positions with size.