SPY Current Trendlines Egypt

Today's topics: "SPY, Current Trendlines and Egypt", are the result of me thinking of a topic to write about recently and having so many to choose from.

As a website publisher, I frequently find myself torn between having to decide what to write on: topics people are actually searching for related to my site, and topics I find of interest that may be so new that I don't know how many people are actually searching for them.

I guess I would have been happy as a newpaper journalist (rather an online newspaper journalist) writing about current topics in another life.

Back to today's article. I decided to write a brief article today on a combination of topics along with some short analysis/commentary as they relate to the current stock market, both in the U.S. and global markets.

Why SPY, current trendlines and Egypt? Well, to sum it up, SPY is one of the most popular traded ETF's among traders with price levels breaking current trendlines amongst the current turmoil in Egypt.

The chart below is a 1 year, daily line chart of SPY. I've added 3 trendlines at points (1), (2) and (3).

SPY Current Trendlines Egypt

Each of these upward sloping trendlines held as support and once broken, provided potentially profitable shorting opportunities. Point (2) would have either been a small profit or a small loss depending on the stop loss in place.

Point (1) though, would have been a great time to go short and with each of these 3 upward moves, the odd's of having some sort of pullback after a steep ascent would have been highly likely each time, as is currently.

Points (1) and (3) also share the same divergence characteristic between each other of higher prices combined with a declining RSI from a potentially overbought signal. Point (2) did not share this characteristic.

Egypt: As long as you've glanced at the news over the last week or so, you know what's going on in Egypt is not good at all. Take a look at some of the headlines I grabbed from the internet:

EgyptAir suspends flights out of Cairo...

Fitch Downgrades Egypt outlook to negative...

Egypt situation stokes market fears...

Stocks retreat on unrest in Middle East...

Fighter jets swoop over Cairo in show of force...

Egypt turmoil rattles Middle East stock markets...

U.S. Embassy tells Americans to weigh leaving Egypt...

Israel worries privately as Egypt descends into chaos...

Iran backs Egypt's "revolution of the noble"...

Global stocks tumble on Egypt unrest, oil jumps...

Egypt shuts down internet, cell phones and social networking...

Armed gangs free Muslim militants in Egypt....

Often times major events across the globe coincide with market tops or bottoms. Although most news related headlines are easy to use as a catalyst for market turns as they and in hindsight most of the time, and easy target. What's going on in Egypt sure could fit if a top is in place.

The stock markets in the Middle East and Egypt have been feeling the effects and it's beginning to spread. Here's a chart of the Market Vectors Egypt Index ETF - EGPT

Egypt Stock Market ETF

To end today's article on SPY, current trendlines and Egypt, the above data and information just add more fuel to the fire so-to-speak, that a market top is indeed in place and the importance of keeping current with what's going on in the world to safeguard any stock trading strategies with open positions as well as preparing to try and take advantage of overbought or over sold situations.

You can learn more about using trendlines to improve your trading on my recent article and free ebook (for a limited time) as well as my recent article on the Dow Jones Forming a Top.




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