CurtisM

$SPX Daily, 03/10/2014: Losing momentum

INDEX:SPX   S&P 500 Index
149 2 6
$SPX             currently moving within confines of a rising wedge, which is a bearish formation. But everything needs to be confirmed, so if $SPX             rises up out of the pattern and keeps moving toward the upper channel line, then that would negate this pattern. This needs to be watched over the next several days to make sure $SPX             does in fact break out of the top and negate the formation.

The $NYSI, Summation Index has been losing momentum since the middle of last week. It rose to 1050 last Friday, the 7th, and today it dropped by a couple of points. It's not uncommon for the Summation Index to turn when it pushes above 1000 and if it is in fact turning then market breadth is weakening and when that happens the market will often pull back. Further, when the market starts to lose underlying strength, you don't need a catalyst to turn the market as the market will often fall of its own weight.

The Cumulative Volume Index fell by 800pts today when the $NYA dropped by only 25pts. On Friday, the 7th, the Cumulative Volume Index fell by 493pts when the $NYA fell only 13pts. Like the Summation Index , the Cumulative Volume Index is hinting at underlying weakness.

This rising wedge pattern and these two signs of weakness need to be monitored over the next few sessions. They can easily right themselves, but if they don't by the end of the week, then this has to be seen as a red flag warning.

IMHO, of course, and subject to change without notice.

GL
marc1610 PRO
2 years ago
Thanks Curtis, your analysis confirms some of my own. We are in the 60th month since March 2009 Low, and it took exactly 60 months (5 year cycle) from the Oct 2002 Low to it its collapse in Oct 2007. This could well be the month to top out but like you say monitor it for weakness and be on alert!! Many thanks for all your charts and great info. Love your work!!
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SimGlenn
2 years ago
Curtis - The SPX did finally come into the 1875-1900 rnage I was looking for, but now is does appear momentum is fading. There were many media reports calling the 1900 cap (like I never before saw). That may have had some influence of coming up short.

A more harmful occurrence would have been a stalled break slightly above upper channel which probably would have precipitated a correction below lower channel.

VIX 5 EMA does not indicate a rally peak, although MACD and RSI seem to be cresting. The SPX is also in contending with upper channel resistance on the 5 year, 2 1/2 year , and 1 year charts, as I have diagrammed previously. Ultimately, the 1 year upper channel will most likley be in the 2000 range by mid-year, and 2100 by year end. 2035 represents year-end 1 year mid-channel and a 10% gain for the year. I see that as the likely end point, probabilities being what they are.

Thanks once again for your open analysis - Glenn
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