A new high for SPY
With another new 52-week high, SPY affirmed the underlying uptrend. The ETF broke resistance around 111 in late December and this breakout held the first day of 2010. A rising price channel has taken shape over the last five months. I am using the upper trendline extension for an upside target around 116-117 for this breakout move. With a close at 113.33, SPY is in the upper half of the channel, which means it is closer to its target than support. I am leaving support at 107 and will consider the daily chart-trend bullish as long as this support level holds.
On the 60-minute chart, SPY broke resistance around 111-111.5 and broken resistance turned into support. Despite a sharp decline in the final hour of trading for 2009, SPY held this support zone with a sharp advance the first day of 2010. This bounce reinforces support at 111. Failure to hold the New Year's surge would be short-term bearish. I am tempted to raise key support to 112, but will hold off for now and give the bulls some room to breathe.
