20 Year SPY Double Top Chart At Key Support Level

Looking at the 20 yr chart for ETF following the S&P 500 – SPDR S&P 500 ETF (PCX: SPY), I noticed an interesting development going into May.  As many of you have most likely seen this double top S&P chart elsewhere, the long-term trend on SPY is looking very bearish with the double top pattern.   If you’ve read about the technical patterns, double top indicates a bearish sign and it’s one of the most reliable patterns out there.

What’s more interesting is that today market was up over 2% intra-day and bounced down heavily thereafter.  The aftermath of today’s market actually develops to the chart above where it is floating right at the multi-year support levels from the past 20 years (in blue arrows).  Right now, we all know it – the market is overbought.  While it could easily continue its rally, and the market has done that in the opposite direction before (we’ve all seen that already right?), many believe that a pullback from here is likely.  If this is truly the case, it would be extremely interesting, even if its coincidental, to see a pullback start in the next few weeks back down from this multi-year support level.  Looking at the slow stochastic (circled in red), it’s certainly getting ready for a reversal, at least temporarily.