SPY vs RSP

Jun 14

SPY/RSP (equal weighted SPX)

• Reached 2008 levels, surpassing already the 2020 spike.
  
• Massive RSI divergence on the monthly chart.
  
• RSI as of writing: monthly at 75, weekly at 73, and daily at 81. Very overbought despite the strong momentum.
  

Jul 15

Note

nearing all time highs, the uptrend has fallen heavily due to a rotation from megacap to mid and small caps.
level to watch: 3.27

Aug 1

Note

rotation has driven the price to the support line and bounced. We could have 2 scenarios:
- megacaps could fall rapidly due to higher volatility in a bearish scenario for both RSP and SPX, throwing the price to 2.08 level
- if a rare event should happen (credit events, war, cyber attacks, etc), we could witness a hike to new highs in pursue of big names to protect portfolios

Aug 9

Note

after the crash, failing to make higher lows, downtrend is on