Bearish divergence on the RSI in 2018 signaled that a correction was due. The S&P 500 ultimately topped out on trendline resistance first established at the peak of 2000.
Interestingly the market broke through the uptrend resistance set between the peak of 2007 and January of 2018. That trendline became support until recently.
Bearish signs:
Bullish signs:
The fundamental picture is still very uncertain, Europe is slowing down as is China. The trade war has put a damper on the confidence of business leaders around the world. On the other hand, all of this may be mitigated by the actions of central bankers.
Interestingly the market broke through the uptrend resistance set between the peak of 2007 and January of 2018. That trendline became support until recently.
Bearish signs:
- The S&P now finds itself at resistance on the RSI.
- It is still below the 200-day EMA.
- It has not broken above trendline resistance.
- It may have just formed a double top on the daily chart as it reached the center of the pitchfork.
- MTF momentum is still not in the green when comparing the weekly to the daily chart.
Bullish signs:
- The RSI is above 50 on the daily.
- The S&P is above the 50-day EMA.
- 14% move off a V bottom is bullish for sure.
The fundamental picture is still very uncertain, Europe is slowing down as is China. The trade war has put a damper on the confidence of business leaders around the world. On the other hand, all of this may be mitigated by the actions of central bankers.
