SP 500 ETF- SPY Weekly Analysis (7/17/2010)

The S&P 500 ETF ,” that uses the symbol “SPY,” has been influenced by the stock market this week. Its stock price stands at $106.6SP 500, ETF,SPY6 As we learn in MSN Money Snaphot they write this about the Fund: “The investment seeks to correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Index. SPDR Trust is an exchange-traded fund that holds all of the S&P 500 Index stocks. It is comprised of undivided ownership interests called SPDRs. The fund issues and redeems SPDRs only in multiples of 50,000 SPDRs in exchange for S&P 500 Index stocks and cash.”

We have been writing in our daily 60 minute SPY analysis to the members of our network that the last three tops were very significant because we were at a strong resistance level that we just could not seem to break.

“Stocks dropped to fresh session lows following news that the preliminary Consumer Sentiment Survey for July from the University of Michigan dropped to 66.5 from 76.0 in the prior month. It had been widely expected to improve to 74.5.” Yes, sentiment has turned bearish again. 

But this is to be expected. All along, we have been writing about the market in a trading zone with large swings bearish to bullish and back again. We are there! We’ve been there and should be trading in this type of market. Friday has given us a well defined downward trend line.

Part of our problem is that China has been the push behind world markets quite often but they have slowed down more than expected also. China’s growth was lower than expected at 10.3% for Q2 2010. This was much lower than the 11.9% in Q1 and still lower than the expected 10.5%.

Daryl Montgomery, writes for Seeking Alpha and explains…”This morning the Baltic Dry Index, a measure of freight rates for international shipping, was at 1700. It hasn’t been at this level since April 2009, only four months after its Credit Crisis low and only one month after the stock market was at its bottom. The last drop of this magnitude was in August 2001 in the middle of that year’s recession. Lack of shipping activity from China, the engine for global economic activity, was cited as the main cause for the falling index.”

We will likely continue down now that the bearish pattern has been more defined.