As I have watched the S&P stall out here just below $141 there are some very interesting technical readings that are flashing sell signals. When the S&P climbed from 1160 to above 1400 from December to April the Relative Strength Index (RSI) went from a bearish reading and steadily climbed along with the S&P to where it became overbought, which is typical for a momentum indicator in a strong uptrend.
We compare that move with the last 2 months. The trend has certainly been up, but it's been choppy. The RSI this time around is not signaling a broad buy signal because even though the S&P has moved up the RSI has remained sideways.
When an indicator is not behaving the way the price chart is this usually indicates their is a divergence of information and is giving a warning signal that, in this case the S&P, is possible ready to reverse the current trend. I also noticed that today was the third day in a row on low volume that the S&P could not top1410, and an uncommon candlestick pattern formed a (ii )doji. Thsi means the last two days we have pretty much traded in a small range, and the break from this pattern could be a large move in either direction. Most of the indicators are pointing to bearish move, but one thing that could really move the market in a positive direction in a big way is if the ECB announces a monetary program or shows their commitment to keeping Europe upright.
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not constitute a buy, hold, or sell recommendation., and should
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