Fuinhaz $SPY read for November 30, 2012

$SPY about to open flat as the economic data this morning showed that personal income was unchanged in October it actually dropped by 0.2%. This is the first decline in spending since May.

You see this is the kind of news that would actually make an average trader just say that the world is ending, and sell everything, But this is so not true. October was a month of uncertainty but I have never seen people buying so much lately. The shops are full, they all have bags, and I am sure they are not empty. Black Friday was a huge success, and just yesterday I was in the mall, and it was packed. The mall open @ 10am, I got there @ 10:20am, and I could not park close to the doors like I usually do. So I don’t buy into these economic numbers.

The $NYMO (McClellan Oscillator) is one notch from the overbought territory, so I do expect a pop, and then we sell hard into the close. The target for us to focus on today is the 142.71 level. If we can cross that we will hit the 1st Fibonacci retracement level at 143.18, and at that point I think that we are going to find some serious resistance. That will be the same time that the $NYMO will clearly be above the overbought territory. Once it is in there it’s only a matter of time until we start to sell off. I believe that we will sell into next week, and hold the 140.11 territory and start to move back up again.

Remember I still have a 45 day rally expectation from the 11/16/2012 low. So take this pull-back as an opportunity to buy good names. As of right now I believe that once we reach January 11 the $SPY will be around or above 148.11. Maybe I am too optimist, but this is what I am seeing on my charts. If there are any changes, I will let you all know in advance, so we can make the proper changes in the current trading style.

$SPY 1st support is 140.37, 2nd support 139.50, and 3rd is 137.83.