Fuinhaz $SPY read for June 3rd 2013

$SPY attempting to bounce off the 61.8% Fibonacci retracement level (163.34). Which does make sense after the drop last week. Now what we need to focus now is how high it may go before it cointinus to slide.

Last Friday, the $SPY sliced through the 20ma like if it was butter. But the again the Fibonacci levels looked to be a better indicator when we were talking about support.

Today we woke up with the $SPY trying it’s best to illude dip buyers who will certainly attack this market until we reach the 1st resistance at 164.43 or even 164.70 (20ma). The question is, will it be able to broke above that level, and start to make new highs again.

I personally don’t think so. I think that this market have been pulli ng back, and from my experience, once we start slicing through many Fibonacci levels, The best thing to do is to play stocks around their support.

A decent pullback for the $SPY and also a very danger zone is 159.40. I personally see us boncing before that.

Please remember what I wrote on May 23rd.

“Usually the 1st level that will get tested is the 20ma. On a daily chart, that is represented by the 1627.07 level. That is great if you just look moving averages to help you time your entries. But I don’t focus only on moving averages. I like to use Fibonacci retracement levels to help me better time the market. So I personally will be looking for a possible bounce at the 1607.35 (give or take).

Once we test that level, we will shoot back up, and finally reach the 1690.60 level that was not reached. That will most likely suck a lot of new retail traders in who do not follow or have little understanding of charts, and that is when the big money will be made.

These retails investors will be most likely buying everything in their sight, and will end up holding a hot bag of potato (not to use any other word). And when the market pullback again and they think that the 1627.07 will hold again, that is when we will flush right through it including the 50ma (1588.52). We will then hold the 1554.00 level that represents the 100ma. Bounce back up just enough to touch the 50ma where everyone is going to say here we go again, and plunge into a bear market.”

I know I am talking about the $SPX instead of the $SPY, but one should know that the $SPY is represented here as a short term trade vehicle, while the $SPX is the long term view of the market.

$SPY 1st support is 163.34, 2nd support 161.75 and 3rd is 159.40.

$SPY 1st target is 164.43 and 2nd is 165.52, 3rd is 166.87, and 4th just for fun is 167.80

Trade what you see, not what you think