The S&P 500 (ETF Proxy – AMEX:SPY) remains range-bound and biased to the downside. While I would expect to see this latest bullish wave turn lower before new highs are seen, but the odds are poor at this time. I will focus on other opportunities until this price action clears up and offers me a more advantaged entry.
Chevron Corp (NYSE:CVX) has performed well after “setting up” last week as a double bottom. I would expect it to stall out near the resistance offered by the 50 period moving average near $110 per share. This offers a perfect opportunity to take some profits off the table and trail stops. At this point I would expect that stops could be trailed to the $105 area, but the price action will dictate that exact level once resistance is tested.
Last week, I forecast that the SPYDR S&P Biotech ETF (NYSE:XBI) was likely to cycle back down to the $190 level before breaking out to a new high. It reached a low of $188.96, and reversed with power.
With such an elegant entry, I would be aggressively taking profits to lock in gains as the market breaks out above the highs at $201.48, and would trail my stop to breakeven so as to take all risk off the table.
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