Resistance Ahead for S&P 500 SPDRs (AMEX: SPY)

April 30, 2008

Shares of the S&P 500 SPDRs (AMEX: SPY) are just a fraction below the 50% retracement for the entire October 2007 through March 2008 decline. That level can be tough to surpass and so far this week, the SPY has backed off from it during both trading days.

Wednesday’s Fed announcement will likely be the catalyst that either sends prices above resistance, or locks in a pullback, likely short-term in nature. When the Fed makes its announcement on Wednesday, watch for a reaction at $141. If the SPY powers above this level, we will likely reach at least $145 in coming days.

If we reverse, expect a correction for the remainder of this week at least, though likely the trend will soon reinstate itself and push prices higher again.

The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy has a position in the S&P 500 SPDRs.