Simple Technical Analysis on SPY, S&P 500 ETF - 9/1/2010 (Distressed Volatility Research - For Internal Use Only) *see charts after the jump
Today SPY pierced the 50 Day Moving Average and held the 50 Month moving average but still needs to conquer the 200 Day Moving Average, 50 Week Moving Average, 200 Week Moving Average and 50 Month Moving average. We'll see how the HFT bots trade the market between now and the elections. Bank of America/Merrill Lynch forecasts a "Growth Recession" ahead (From LA Times).
"Bank of America Merrill Lynch on Wednesday downgraded its forecast for the economy, calling for a “growth recession.”
What’s that? As BofA Merrill economists describe it, the U.S. would continue to grow in the fourth quarter and in 2011, but not fast enough to generate significant employment gains." (read article for more numbers)
Speaking of HFT, I think CNBC's Fast Money needs to hire an HFT Robot correspondent to tell people what's really going on in the market. Zero Hedge is the only site out there talking about it in depth.
Hidden dark pools and high frequency trades are controlling the market. Some of it is interesting though. Check this out, the whole market is trading based on the 2s10s30s yield curve (2-Year Treasuries, 10-Year Treasuries and 30-Year Treasuries), S&P E-Mini Future and AUD/JPY (Australian Dollar/Japanese Yen) and changes trigger HFT momentum, see the post at Zero Hedge. Also read this "Bank of America Now Proudly Exporting HFT Market Death And Destruction To Asia" lol.
So you can see that SPY still has a few downtrends to kill in order to break the descending structure from April and ultimately October 2007. I'd rather watch GLD, SLV, TLT and/or ratios until SPY makes a forceful move. Below are the Daily, Weekly and Monthly SPY charts.
SPY Monthly (SPDRs S&P 500 Trust Series ETF) - FreeStockCharts.com
SPY Weekly Chart - FreeStockCharts.com
SPY Daily Chart - FreeStockCharts.com