Ignore the Wave Counts on
this chart and let's focus on the indicators and the pattern
(trendlines).
Some
observations of the technicals regarding the SPX Weekly
Chart.
Bearish Observation #1
The SPX was
unable to remain above it's weekly downtrend line off the October
2007 highs (log scale).
Bearish Observation #2
Negative
Divergence was building up on the RSI prior to the peak (still
watching the blue trendline).
Bearish Observation #3
First negative
MACD cross since March while the MACD Histogram has been slowly
declining for months showing waning upside momentum.
Bearish Observation #4
The rising
trendline off the July lows shown on the Daily Linear Chart was
broken to the downside. This took the SPX below the 13 Week
EMA for the first time since July. The SPX remains above its
34 Week EMA and the 13 Week EMA is still above the 34 Week EMA
which is something to monitor going foward.
Bearish Observation #5
Volume was
declining during the advance and has now recently increased during
the pullback.
Bearish Observation #6
The CMF (Money
Flow Indicator) has recently moved into negative territory for the
first time since the uptrend began in March after showing weakness
for several months.
Bearish Observation #7
The Regular (14,3) Weekly
Stochastics dropped below 50 for the first time since March.
A cross below 50 is a warning sign of a possible impending
intermediate trend change and tells me to watch the 60 Period
Stochastics closely for a possible break of the 80 level.
Bearish Observation #8
Breadth (participation among
stocks) has been declining in the overall rally as the rally
unfolded.
Bearish Observation #9
On Balance Volume flattened
out as the SPX made the recent highs. It then turned lower
and broke below the 21 day EMA which served as support for the
entire rally.
In summary, the weekly
indicators were displaying a loss in upside momentum and have now
turned down. They can change BUT they are currently pointing
down and thus the onus is clearly on the bulls.
An Examination of the Weekly Technicals for the SPX
Posted by steve on 7th of Feb 2010 at 02:29 pm
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=3&mn=2&dy=0&id=p44258611519&a=132446664&listNum=61
Ignore the Wave Counts on this chart and let's focus on the indicators and the pattern (trendlines).
Some observations of the technicals regarding the SPX Weekly Chart.
Bearish Observation #1
The SPX was unable to remain above it's weekly downtrend line off the October 2007 highs (log scale).
Bearish Observation #2
Negative Divergence was building up on the RSI prior to the peak (still watching the blue trendline).
Bearish Observation #3
First negative MACD cross since March while the MACD Histogram has been slowly declining for months showing waning upside momentum.
Bearish Observation #4
The rising trendline off the July lows shown on the Daily Linear Chart was broken to the downside. This took the SPX below the 13 Week EMA for the first time since July. The SPX remains above its 34 Week EMA and the 13 Week EMA is still above the 34 Week EMA which is something to monitor going foward.
Bearish Observation #5
Volume was declining during the advance and has now recently increased during the pullback.
Bearish Observation #6
The CMF (Money Flow Indicator) has recently moved into negative territory for the first time since the uptrend began in March after showing weakness for several months.
Bearish Observation #7
The Regular (14,3) Weekly Stochastics dropped below 50 for the first time since March. A cross below 50 is a warning sign of a possible impending intermediate trend change and tells me to watch the 60 Period Stochastics closely for a possible break of the 80 level.
Bearish Observation #8
Breadth (participation among stocks) has been declining in the overall rally as the rally unfolded.
Bearish Observation #9
On Balance Volume flattened out as the SPX made the recent highs. It then turned lower and broke below the 21 day EMA which served as support for the entire rally.
In summary, the weekly indicators were displaying a loss in upside momentum and have now turned down. They can change BUT they are currently pointing down and thus the onus is clearly on the bulls.
Thanks Steve, great observations.
Posted by piclez on 7th of Feb 2010 at 05:58 pm
Thanks Steve, great observations.