S&P 500 Daily Buy/Sell SPY Chart Pivots, Changing Euro Focus (SPY, QQQ)

OK, so the Greeks are trying to stay in the Euro for at least one more election cycle.  The markets have sold off as reality sets in that it may be more expansive to help Greece than to boot it.  This makes the daily charts crucial for any investor right now.  We are tracking the daily buy/sell pivot points on the SPDR S&P 500 (AMEX: SPY) as the most liquid equity ETF that there is.  The aim is to help any trader avoid buying at the wrong time or shorting just before a intraday rally.

Erlanger Value Lines are designed to identify key levels for the intraday trader or for anyone trying to establish a new position during trading hours. The Value Lines fall into three categories: Support and Resistance, Extreme values and Range values. From a practical point of view, the Value Lines can act as targets and triggers for short-term trades.

Some think it is uncanny how these levels stop or turn back short-term price swings. We do not. Why? Because both high frequency traders and program trades have built these levels into their models which cause them to gravitate to resistance, pivot or support along with range values like the 5 and 60 minute ranges. We have compiled here the daily chart, the daily analysis for traders to use, and then we have followed it with a general guideline after the daily commentary along with a sample chart.

For today’s S&P 500 SPDR chart analysis, Phil Erlanger said, “Friday saw the SPY move above resistance during the trading session. Today we are trading pivot to resistance on SPY with a focus on the pivot line. We have no edge on what the bias is for today and we would suggest following the bouncing ball. The news around Greece, PIIGS and the G-20 have clouded the ability to let markets move smoothly. Pivot is $133.83 today. If this level can hold past 10:30 a.m. EDT, then the long side could be played. Conversely, a failure of pivot could be played on the short side. It is doubtful we remain at pivot. If you use the 10 minute Displaced Moving Average within Erlanger Chart Room, then you should use this bias indicator (intraday) as a supplement to the value lines.”

The Erlanger Value Lines can be accessed via Erlanger Chart Room. Given that we are using real time data, Erlanger Chart Room will require a subscription to eSignal Q Charts or access via Bloomberg’s data api. For more information we direct you to sign up here.

Many of the core DJIA stocks are down on the day with banks and oil stocks in the red, but the technology sector is keeping the broader market from looking bad.  To prove the point, the PowerShares QQQ (NASDAQ: QQQ) opened down in the red and it is now up 0.3% on the day.

General Notes:

• If price moves above the red Resistance value line, then the intraday bias turns positive:
• A positive bias reflects times when only long trades are considered.
• If price moves below the green Support value line, then the intraday bias turns negative:
• A negative bias reflects times when only short trades are considered.

Additional general notes for how to use these charts:

• If price remains within the green Support and red Resistance value lines, then the bias is neutral. The pivot line can be used to establish an intra Value Lines bias. Pivot to Support is negative and Pivot to Resistance is positive.
• If price remains within the first hour high and low value lines, then the bias can also be viewed as neutral. This is especially true if the first hour range is inside the range set by the support and resistance value lines:
• A neutral bias reflects times when both long and short trades may be considered or (depending on the traders style) a time for no trading. All Erlanger Value Lines can be used as short term target levels. This is especially true if a few are clustered together.

June 18, 2012