S&P Update

The S&P 500 (ETF Proxy – AMEX:SPY) is coming into a very import test zone for the bulls. There is a double top to fire up the bears, and a pullback to moving average support to attract the greedy bulls back into the market.

This pattern conflict sets up a tug-of-war that should resolve itself in the week to come, and my odds measuring tools tell me that the bears are going to win out.

Cisco Systems (NASDAQ:CSCO) has pulled in to test the 20sma (Blue Line) as forecast.

I would trail stops for any remainders to the $27 level as I think any material break of the current 20 ema (Blue line) would indicate a trend failure for this stock..

 

The stock of Proctor & Gamble (NYSE:PG) has been rallying on growing power in recent weeks, and is now forming a buyable pullback.

I am still looking for a valid reversal candlestick patterns to form within the “buy zone” (grey box)  to trigger a long entry.  Stops would be determined by the pattern that forms, and I expect that we will see that setup in the next couple of days…

Merck & Co (NYSE:MRK) has formed a descending wedge pattern on its daily chart.  With the bearish power showing on deeper timeframes, I would expect to see this break down and begin to trend down this week.

With a trigger point under $56.50, and stops set above the 200 sma (purple line) near $58.25 I think this stock could easily see a test of support near $55, where I would take some partial profits.