SPY gives potential Buy Signal! 7/16/11

My SPY system gave a potential buy signal based on a buy stop at 131.87 on SPY. That means if the price exceeds the previous day’s high, the system says go long. SPY has been pulling back and this may be a good place for it to launch an assault on the previous high. The chart has been going sideways for a long time and there is still no clear direction.

The debt ceiling debate can affect the market’s response over the next week or two. I was asked by a couple of friends whether they should pull out of their positions. I am still hopeful that those well paid congressmen and women we have in Washington are smart enough to know that a deal has to be done or else it will be very costly for the nation. That of course assumes that they will put the nation in front of their personal positional gains in politics and the jury is still out on that.