The reason I am is because of the signals that I getting from the above chart. So come and read these signals with me, and later share in the comments section and tell me what you think... Let's get started!
S&P 500 Index Prints Additional Weakness
Our main focus for signals in past analyses was mainly a divergence on the and , but now additional weakness is showing up:
- On the chart above we can see how the ~2815 level, marked with a purple dash line, has rejected the SPX over and over in a 1,2,3 sequence. On the 13 March, the SPX had its third (sixth) rejection from this resistance after the bounce.
- We can see decreasing trading , which is a signal that points to lack of momentum for the move that is in play.
- The daily candle for the 13 March hit a high at 2821.24, making it higher than the peaks of the 25th Feb. and 4th March. But when you look at the , you can see it going lower and lower; here is the once more. The same can be spotted on the .
- I also drew an alternative scenario which is less likely which are the purple arrows.
In a nutshell, we have a triple top, decreasing and strong divergence.
According to the signals above, the SPX will make a strong down move soon. For these signals to be invalidated, the SPX needs to print a high candle above 2821 and follow up by breaking its all-time high.
What's your take on the next S&P 500 Index move?
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Thanks a lot for reading.
You are welcome.
Anything can happen. FED meeting next week which could move markets. At any point Trump and China could strike a deal which would likely catapult us to a new ATH. Barring that I think a retest of the December lows is likely before a new high is made despite the incredible rally we've seen.