SPDR Trust, (AMEX:SPY) printed 2 consecutive inside days on Tue & Wed with low volume as the market awaits the auto industry bailout approval. With 2 inside days, the market is now like a coiled spring. Expect a big move coming. It is now facing the 50 day moving average and also a downward trendline overhead. Having said that, it is also in a inverse head and shoulder pattern, which is a bullish pattern. In fact, many of the charts are in the same pattern as the SPY, i.e. facing overhead resistance, but also forming a bullish pattern. Which way will the market break? We should have an answer end this week or early next week with the FOMC policy statement on 16 Dec.
The Market Vectors Agribusiness (NYSE:MOO), which is the ETF for agri stocks like AGU, POT, MOS, is also in a similar pattern as SPY, but more bullish as it has already broken above the downward trendline and 50 day moving average. You may wish to keep some agri stocks on your watchlist.