S&P 500 (SPX) has been maxed out for a while now, and I am quite bearish on this index as you might already know from my previous analyses.
The reason I am bearish 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 bearish divergence on the MACD and RSI, 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 volume, 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 MACD, you can see it going lower and lower; here is the bullish divergence once more. The same can be spotted on the RSI.
I also drew an alternative scenario which is less likely which are the purple arrows.
In a nutshell, we have a triple top, decreasing volume and strong bearish 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 volume 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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With you track record (being wrong 99% of the time) I really doubt that this will end well for your subs. )))
AlanSantana
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@niceryders, Up to 50 positive trades shared here:
You are welcome.
ThinAir
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Idea invalidated, 3000 Coming
This_Guhy
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Two week chart (not really standard) looks like it is about to paint a reversal candle stick pattern.
Namah-Te
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chchart
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Thanks for your chart! Can the market go irrational for some period of time before correcting itself?
AlanSantana
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@chchart, This is a possibility but for conventional markets, it is harder to see wild and crazy movements. Smart/big money has been selling for weeks near the top so there isn't much more need for a wild move. Still, this is a possibility that we still consider.
sumeetlunia
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Most of the retail people in market are Bearish so market may rise and trap bears as Market rise when retail people think it will fall and market falls when people think it will rise
Making Money for retail people and small traders is not so simple
Please share your views on it
David_Scott
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We now have a bearish divergence on SPX with these new highs. Low of the year on VIX. Massive VIX april / may call buying (500,000+ contracts) and massive VIX May put selling. And we also have RUT, DJI, TRANS, Banking ETFs, and other indices not supporting the bullish engulfing weekly candle pattern present on NDX and SPX. Generally speaking RUT and Midcaps lead both bullish and bearish patterns so RUT looking very weak is another confirmation that a trend reversal is approaching.
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.
shaggad
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great analysis, You think it can get to $293? Take a look at my analysis for SPY if you dont mind.