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Monday Blues?

April 5, 2009

The Day on Monday

April 2, saw SPY make a high of 84.61, although definitely a 2-month best, but is it enough to signal a transition?[The image is clickable and leads to a enlarged version]

Apparently not! Note the drying volumes at the lower right corner, indicating very low buying interest at or around 84. This has effectively put an exhaustive top at place. Even if it indeed breaches the yellow top line on Monday, breaching Feb high 87.5 is definitely a tough ask.

Monday should see, a gap up at around 87.5, with bears closing into pull SPY down to the trendline and below. If volumes are high, then traders will quick to sell and sell short.

UPDATE: As of 6th April 2009, 19.29PM IST[9.59AM ET], SPY gapped down and is trading at 83.12, 1.16point down,-1.39%

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