Trader Mike

As I type this we’re set for a bounce this morning. Many traders would prefer to see a weak morning followed by a strong close in order to hopefully flush out the last of the sellers. It doesn’t seem like that going to happen today. Anyway, here are some charts I’ll be watching closely over the next couple of days. First are the indices followed by some individual stocks:

The S&P broke Thursday’s support very late in the day Friday as buyers walked away ahead of the weekend. I’ll be watching Thursday’s low today as an important inflection point.

I’m watching last week’s lows for support on the Nasdaq.

I saw this article in the January issue of Active Trader Magazine: “Trading a different S&P 500: The RSP vs. the SPY“. The RSP ETF contains the same 500 stocks that make up the S&P 500 but they are equally weighted as opposed to the S&P’s capitalization weighting. The interesting part is that the RSP has been outperforming the S&P 500. Here’s a quote from another article about RSP:

Most investors would agree that just because a company is bigger doesn’t mean that it is a better investment. Let’s look at the most well-known index, the S&P 500, and its well-known ETF, the SPDR. Many investors think that investing in the …