Fuinhaz $SPY read for December 13, 2012

$SPY to open flat after yesterday crazy gallop. The $NYMO (Mcclellan Oscillator) have not closed above the overbought territory once, even though we crossed over it multiple times on previous days. The pattern that I currently see on the $SPY is a possible formation of the head on a head and shoulder pattern. But until that really happens it is just wishful thinking.

The current Fibonacci retracement level is @ 143.17. So watch that carefully for market direction. If we hold we may continue to go higher. At the same time we can go higher keep in mind that the $NYMO is very close to go over the overbought territory, so please be cautious. And under 143.17 we can gain traction and drift lower. If we do drift lower, the chances of testing the 140 level are very real, and healthy for this market in terms of pullback so we can continue to ascend back to the 150 level. I think we still have the chance to go there byt Jan 11 which completes my 45 day bullish cycle.

I don’t think I ever mentioned this but I follow the amazing @Legacy_Trades. He is a consistent trader who I had the pleasure of talking by e-mail and have helped me have a better view of the market. He’s very humble, and I give credit to him regarding the 45 day outlook. He mention it one day on the Twitter stream, and when I plotted the idea on my charts it looks like a very robust theory. And that is where the Jan. 11 target came up.

This goes to show that I do credit people when they help me have a better view of the market, and I do suggest you to follow him. He’s the real thing, and I humbly thank him for taking the time to answer my questions.

$SPY 1st support is 142.56, 2nd support 142.07, and 3rd is 141.44.