SPY Recently broke 200 Day Moving Avg
 

Don't want to rain on David's parade by posting this in his thread.So since the 200 Day MA seems to be an important TA indicator. I thought I'd solicit opinions on what to do about buying and/or selling SPY:

1 YR Spy Chart

Maybe this isn't a valuable TA indicator. If not which ones are, if so what should one do regarding SPY?

Re: SPY Recently broke 200 Day Moving Avg
 

if anyone could share some analysis and reasons behind (your analysis), I would appreciate it

Re: SPY Recently broke 200 Day Moving Avg
 

im short S&P through an etf that tracks the downside by two times. symbol (sds)

my reasoning has nothing to do with moving averages however. Ive got many more short positions on US markets and the reasoning is entirely macro.

Re: SPY Recently broke 200 Day Moving Avg
 

The problem with using one of the more common moving averages as a technical indicator is that you set yourself up to be exploited by specialists. If they plan on moving a stock up, they know that they can accumulate more of it by first moving it below an important moving avg # and inducing people to sell.

If you look at the last time the stock broke the 200 day ma, it popped right back up. Also notice the tremendous volume increase as it broke through on the downside. That means specialists are accumulating mucho inventory. They sure aren't gonna sell it for a loss.

My guess on this stock is that it's gonna sit where it is for while, maybe a few months, and, then go back up.

Re: SPY Recently broke 200 Day Moving Avg
 

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The problem with using one of the more common moving averages as a technical indicator is that you set yourself up to be exploited by specialists. If they plan on moving a stock up, they know that they can accumulate more of it by first moving it below an important moving avg # and inducing people to sell.

If you look at the last time the stock broke the 200 day ma, it popped right back up. Also notice the tremendous volume increase as it broke through on the downside. That means specialists are accumulating mucho inventory. They sure aren't gonna sell it for a loss.

My guess on this stock is that it's gonna sit where it is for while, maybe a few months, and, then go back up.

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Just curious if this is a canned response that you cut and paste? The reason I ask is that the SPY is composed of the S&P 500, it is not a single stock controlled by specialists.

On a similar note if specialists are so omnipotent why are they leaving the floor in droves and losing money hand over fist these days? You do realize I hope that specialists are only involved in about 1 in 30 stock trades on the New York Stock Exchange, wheras the rest of the trades take place electronically.

Jimbo

Re: SPY Recently broke 200 Day Moving Avg
 

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im short S&P through an etf that tracks the downside by two times. symbol (sds)

my reasoning has nothing to do with moving averages however. Ive got many more short positions on US markets and the reasoning is entirely macro.

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I'm guessing your positions are based on macro economic considerations rather than TA.

Re: SPY Recently broke 200 Day Moving Avg
 

The 200dma looks to have no influence on the SPY.

BTW, SPY is on the AMEX, not the NYSE.

Re: SPY Recently broke 200 Day Moving Avg
 

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The problem with using one of the more common moving averages as a technical indicator is that you set yourself up to be exploited by specialists. If they plan on moving a stock up, they know that they can accumulate more of it by first moving it below an important moving avg # and inducing people to sell.

If you look at the last time the stock broke the 200 day ma, it popped right back up. Also notice the tremendous volume increase as it broke through on the downside. That means specialists are accumulating mucho inventory. They sure aren't gonna sell it for a loss.

My guess on this stock is that it's gonna sit where it is for while, maybe a few months, and, then go back up.

[/ QUOTE ]

Just curious if this is a canned response that you cut and paste? The reason I ask is that the SPY is composed of the S&P 500, it is not a single stock controlled by specialists.

On a similar note if specialists are so omnipotent why are they leaving the floor in droves and losing money hand over fist these days? You do realize I hope that specialists are only involved in about 1 in 30 stock trades on the New York Stock Exchange, wheras the rest of the trades take place electronically.

Jimbo

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All right, let me see if I can deal with this multi-pronged attack.

While SPY isn't a company per say, but a composite of the S&P, it barely makes a difference, as the market almost always moves in the direction, or "In Sympathy" of the 3-5 most active stocks on the dow. So, for all intents and purposes, it may as well be one company.

As far as canned responses, I don't claim that every thought I express here is an original one, but the post is not a cut n' paste. However, I find it interesting that you would accuse me of such a thing considering that, in the same post, you parrot an article that was just in the WSJ (I know I read it somewhere) about Specialists only being involved in 1 out of 30 trades. Had you read between the lines, you would've realized that the stat means nothing without knowing the size of the trades. What percentage of the big block trades do specialists handle? It should set off alarms in your head that the WSJ is trying to downplay the roll of specialists and did so with such an easy to crush statistical argument.

As far as them losing money, I don't have info on their incomes as it is almost impossible to come by, and, I'm guessing the ones that went belly-up were specialists of dead stocks. However, from my understanding, every single stock on the NYSE has a specialist firm assigned to it.

Re: SPY Recently broke 200 Day Moving Avg
 

I didn't respond to your post and I certainly don't dismiss what you say necessarily. Food for though definitely. I appreciate your responses as I do the others. Thanks for posting.

Re: SPY Recently broke 200 Day Moving Avg
 

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However, from my understanding, every single stock on the NYSE has a specialist firm assigned to it.


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I do believe you are indeed correct. What about the exchange where the SPY is traded?


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I find it interesting that you would accuse me of such a thing considering that, in the same post, you parrot an article that was just in the WSJ (I know I read it somewhere) about Specialists only being involved in 1 out of 30 trades.

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Where I come from that is called due dilligence and research. Try it sometime.

I might add that unless you are buying hundreds of thousands of shares at one time the specialists aren't going to be able to screw you silly or unless it is a very thinly traded stock they can't effect the price you pay at all. Last time I checked the SPY is not thinly traded at all.


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I'm guessing the ones that went belly-up were specialists of dead stocks.

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Nice guess but no cigar for you today, thanks for playing. I'm not saying that you don't have a point when it comes to specialists but tell me, how do you plan on keeping a smooth transition of stock trades on the NYX without one under the current conditions?

Finally as I wrote since as long as there is a seller and a buyer the specialist does not intervene at all, they are bypassed electronically. Do you understand this salient point at all?


Jimbo