Our original published chart for SPY , /www.tradingview.com/v/IlRjkmwa/, discussed our analysis regarding the likely breakout of the Long Term Short which was first reacted to on 3/13/2012. We stated in that analysis "Normal market activity would be a price above the top of the Short entry range, a pullback, and then a resumption of the upward trend before an all-time high is reached." So far we have witnessed the price above the LT Short, and we are now in a pullback or retrace phase.
We have shown on the chart some of the levels that were identified for our clients during the time covered by the chart.
But what are the levels that are being traded and what target levels should investors/traders be looking for?
We identified for our clients a Short Term Short which is shown on the chart. The true high for SPY on 9/14 was 148.11 so the short level was reached though the BATS exchange does not show the correct data. The Aggressive Intraday Short second target was reached at the level designated 1 on the chart and short covering/profit taking has resulted in a pullback. Normal intraday market reaction would be a pullback to test the next short levels. We have identified a Very Aggressive Intraday Short(VAIS) for the 15 min chart which has seen a reaction but it is probable that this short will fail unless there is some unfavorable news overnight.
A Very Aggressive Intraday Long(VAIL) and its' 1st and 2nd targets are shown as well as an Aggressive Intraday Long(AIL), both of which are in play as of the time of this analysis. We have identified the next short that will be critical on this time-frame if the longs are sufficiently supported. On smaller time-frames there are a couple other short levels but they are not shown so as to minimize chart clutter.
As we have stated in some of our other analysis, each investor/trader must decide which style suits their risk profile. Some are very aggressive, some are aggressive, and some are less so. Each one must know which style suits them and our analysis will show you where like-minded investors/traders will be entering and exiting at the respective price levels. Knowing where the investors/traders that are taking the opposite side of your trade will react is also of immense value in evaluating price action when these levels are reached.