The S&P 500 $SPX signaling strong divergence

SP:SPX   S&P 500 Index
This probable next correction is very odd. As the index price action is showing strong negative divergence with de ADL and the MACD (one confirming the other), there is no euforia. Is like everyone is expecting this to happen. It may be just lack of interest of the market or that is summer time.

The Fear & Greed Index is in extreme fear, that almost never happens on tops. Still I can't ignore the technicals that are at least signaling that the SPX is losing strength. So this is time to manage risk. I'm tightening my stops and suggesting to sell at least part of the positions we have at some of the winners like PFE and GOOG .

We opened a short position on the index but I'm still holding some stocks. Also, if the correction actually happens would be a very good opportunity to find strong stocks for the next leg up. I will be looking for strong relative strength and 52 week highs.



The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.