SPY Buy signal 9/16/11

SPY exceeded the buy stop value of 121.47 and the long signal was triggered. See my last post and also chart below. Buy at your own risk.

It is interesting that the buy signal came after over 6 months of waiting after receiving the exit on long on SPY back in 2/23/11. Does that mean the signal is strong? No. It means nothing more than we have an up signal and nothing is guaranteed. That is the very nature of trading. It does mean for me that I will now be looking for a pullback after 5 up days to go long. The chart on SPY also shows the prices approaching the 50 day moving average – the red line. That could provide some resistance. I had long signals on several of the stocks that I track earlier in the week; but stayed on the side line as the direction on SPY was still down or exit on long. Now I feel more enthused to head in the direction of the tide according to my technicals.

Stronger stocks like AMZN, AAPL, AZO, PCP have already started climbing and approaching their highs. These stocks did not take much of a beating on the downturn over the last few months. I still see fundamentals as weak – consumer confidence, GDP, political climate, and Western world debt which weighs down on growth. On the other hand this is a pre-election year, interest rates are low, and several big corporations are flush with cash and making solid profits. As usual the future is grey and cloudy.

They say the market likes to climb a wall of worries.  We will see.