S&P 500 has a disturbing fractal
Updated
If you are new to Technical analysis here is a primer to unlock the main chart when it comes to divergence
Normal Divergence (Trend Reversal)
Bearish: Higher highs on price action but lower highs on the indicator
Bullish: Lower lows on price action but higher lows on the indicator
Hidden Divergence (Trend Continuation)
Bearish: Lower high on the price action and higher highs on the indicator
Bullish: Higher low on the price action and a lower low on the indicator
The main chart see blue on the RSI has bearish divergence which suggest a reversal of the current uptrend from the peak in March 202 and our current peak. The black arrows show bearish divergence within each 0upgrend on the MACD histogram and the MACD cross at the crux of the wedge was particularly devastating.
Here we see I changed the color scheme a bit to help show where a potential zone of defense or last stand could happen by buyers or policy makers.
With another view this time with the monthly Bollinger Band we can see we have slipped the BB and how the last dump interacted with the BB. There was some slight respect for the baseline and maintaining out of the base of the BB was very difficult. Additionally it looks like we have some reversal candle formations/patterns at the wedge resistance. Combined with the bearishness in the main chart it is not looking good.
Back to the primer. If/when this breaks down we can look for bullish divergence on the indicators to try and find out any reversal looks technically. If we hit the orange trendline on the main chart we would hope to see classic bullish divergence with a higher low on our indicators.
Normal Divergence (Trend Reversal)
Bearish: Higher highs on price action but lower highs on the indicator
Bullish: Lower lows on price action but higher lows on the indicator
Hidden Divergence (Trend Continuation)
Bearish: Lower high on the price action and higher highs on the indicator
Bullish: Higher low on the price action and a lower low on the indicator
The main chart see blue on the RSI has bearish divergence which suggest a reversal of the current uptrend from the peak in March 202 and our current peak. The black arrows show bearish divergence within each 0upgrend on the MACD histogram and the MACD cross at the crux of the wedge was particularly devastating.
Here we see I changed the color scheme a bit to help show where a potential zone of defense or last stand could happen by buyers or policy makers.
With another view this time with the monthly Bollinger Band we can see we have slipped the BB and how the last dump interacted with the BB. There was some slight respect for the baseline and maintaining out of the base of the BB was very difficult. Additionally it looks like we have some reversal candle formations/patterns at the wedge resistance. Combined with the bearishness in the main chart it is not looking good.
Back to the primer. If/when this breaks down we can look for bullish divergence on the indicators to try and find out any reversal looks technically. If we hit the orange trendline on the main chart we would hope to see classic bullish divergence with a higher low on our indicators.
Note
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