Chart Talk {02.10.17}

Above is the current chart of the S&P 500 ETF, SPY.  The chart is from Tradingview.com and you can double-click on it to make it larger if you would like a better view.  There are a couple of things to note here.  The last time we looked at the index was about a month ago and SPY had been consolidating in a trading range shown since then.  You can see that in the chart between those two red horizontal lines near the north-east corner.   We broke out of that range a few week ago and have since traded in an even narrower range defined by that smaller green line above.  We're testing the top end of that range as I'm writing this. 

Similarly to our thoughts last month, we'll have to see whether this action represents some sort of topping pattern to the major indices or is simply a pause from which we again break  forward to new highs.  Only time and more economic data is going to give us the answer to that question.  We are also currently overbought by our work but not to the extent we were last month before we broke to new highs.

Also as I'm writing this they're saying on the TV that the S&P 500 is now up six out of the last seven days.

Back next Tuesday.  I'm in and out seeing clients next week so posting will be a bit light.

*Long ETFs related to SPY in client and personal accounts although positions can change at any time without notice or dissemination on any other form of electronic media.