Market Monday's

Er -- or maybe market Tuesdays?

Anyway -- I'm back from a long weekend. Even though I'm not 100% I am feeling better.

So -- let's play a bit of catch-up and get a small lesson in chart reading.



Above is the daily chart for the SPY's. Notice we have a small problem -- where is the real upward sloping trend line. This is a great example of the "art" behind reading a chart.

-- The first line closely jibes to the price movement from mid-late July and early August. It comes close to tying together a 3-4 lows, making it a logical choice.

-- The second line ties together the bottom in mid-July with the a single point that is more thann a month away. So -- why use this line at all? In his book Technical Analysis of the Financial Markets author John Murphy (who put together Stockcharts.com) wrote a small section on fans.

Sometimes after the violation of an up trendline, prices will decline a bit before rallying back to the bottom of the old up trendline.

Notice how we may have that here.

Aside from that, notice the following:

-- Prices are below the 200 day SMA.

-- The 200 and 50 day SMA are both moving lower

BUT

-- The 10 and 20 day SMA have moved through the 50 day SMA

-- The 10 and 20 day SMA are both moving higher

-- Prices are above the 10 and 20 day SMA, which will keep these SMAs moving higher