Chart Talk {02.18.16}

Here's an update of the S&P 500's ETF SPY.  Chart is from FINVIZ.com.  Note the following:

1.  Short-term now the market is overbought.  Market clues on direction will be garnered on how the market handles this overbought condition and that next level of resistance right above where it's currently trading.

2.  Major support is in red now around 182 on the ETF.  That is sort of the market's line in the sand right now.  It represents a level now that the market has revisited 3 times in 6 months.  

3.  Blue lines in the middle of the chart are secondary levels of resistance right now.  They will become support if the market manages to pierce through them to the upside.    As stated above the market is near that next level of resistance, currently around 195 on the ETF.   Probability suggests that the first attempt at this should fail.  In that case clues to future direction will be garnered on how the market handles that rejection.

4.  Green line at the top denotes major resistance as it represents previous market highs that failed to advance.  

5.  Yellow shaded areas represents overhead supply.  This level of trapped longs goes now back to last spring and has the potential to be tough slogging for the index as the market moves closer to those prices and tries to slog its way higher.  Theory states that these levels are full of "trapped longs," investors who bought at higher prices and will be anxious to sell the closer price returns to their cost basis.

We're going to take a look later next week at some future probabilities for the markets in 2016 via charts.  

Back Monday.

*Long ETFs related to the S&P 500 in client and personal accounts, although positions can change at any time without notice.