• 10 hours El Salvador’s Surprise Bitcoin Move
  • 3 days Markets Unfazed As Inflation Hits 13-Year High
  • 4 days How the Token Economy is Disrupting Financial Markets
  • 6 days FBI Investigating 100 Types Of Ransomware Attacks
  • 8 days Fed Ends Corporate Credit Emergency Lending Program
  • 10 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 12 days The Real Reason Your 401k Has Been Lagging
  • 12 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 14 days The Market Is Ripe For Another GameStop Saga
  • 17 days Senate Grills Big Banks Over Pandemic Opportunism
  • 19 days Cannabis Has A Major Cash Problem
  • 19 days Ransomware Netted Criminals $350M In 2020 Alone
  • 20 days Russia Is Taking On Google
  • 21 days Chinese Regulators Deal Another Big Blow To Bitcoin
  • 22 days Ohio Residents Brave Vaccine for Chance To Win $1M
  • 24 days Inflation Is Coming. Are You Prepared?
  • 25 days Travel Might Get Another Supersonic Disruption
  • 26 days The World Is Running Out Of 6 Key Resources
  • 27 days $15/Hour Minimum Wage Might Happen Naturally
  • 29 days Money-Laundering Binance Probe Report Adds To Bitcoin Woes
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

TheWaveTrading

TheWaveTrading

TheWaveTrading

My goal is to establish the most likely path that the price of a particular asset will undertake and profit through ETF instruments both on…

Contact Author

  1. Home
  2. Markets
  3. Other

SP500: Pullback or Destructive Decline?

After a big sell off this week the resumption of the up-trend can be jeopardized with more follow-through. If this is the case, from the May high a large corrective pattern could still be underway which could be forming a Triangle (Bullish or Bearish).

The lack of impulsive moves both to the upside and to the downside is resulting in a murky outlook.

Breadth Indicators are now clearly signaling weakness ahead:

  • The NYSE Summation Index has triggered a sell signal. Without a breadth thrust that would reverse the bearish bias the next buy signal might occur when the RSI enters the oversold zone (Below the 30 line)

NYSE Summation Index Daily Chart

SP 500 key price levels:

a) Weekly time frame

- Support:

The range 2020 - 2013 is a critical support. If it does not hold the odds of a large decline would substantially increase (Towards the lower Bollinger Band)

- Resistance:

To the upside bulls have to reclaim the 27 wma = 2061 in order to regain the upper hand

S&P500 Weekly Chart
Larger Image

b) Daily time frame:

- Support:

The range 2021 - 2018 (Support 1) then we have the 50 dma = 2007 (Support 2)

- Resistance:

Friday's gap at 2046 (Resistance 1) and the 200 dma = 2064 (Resistance 2)

S&P500 Daily Chart
Larger Image

We have several indicators that are showing extremes:

  • Equity Put/Call Ratio (Contrarian indicator)

CBOE Options Equity Put/Call Ratio Daily Chart

  • Daily Stochastic and RSI (5) have ended the week deeply oversold

Momentum
Larger Image

  • The McClellan Oscillator is below the lower Bollinger Band and it has crossed the oversold line. The RSI (5) is also oversold

NYSE McClellan Oscillator Daily Chart

Barring a crash next Monday the short-term oversold readings should favor a countertrend rebound (Bearing in mind that the short term trend has now shifted to the downside).

 

Back to homepage

Leave a comment

Leave a comment