Before I begin this post I’ll note that my largest position is a short on SPY, but my overall positioning in US and global stocks is decidedly long. So if/as the bearish potentials shown here look to activate I will alter positioning accordingly.
The weekly chart is not a pleasant looking thing.
The US stock market has been rallying hard since Christmas Eve and the rally has been busily making people (buy not necessarily the machines?) forget the technical damage that was done in Q4. Bulls are again comfy under the watchful eye of Daddy Dove Eye.
One positive thing the rally has done is to get above our targets of 2815, which was the Q4 2018 high. That is now generally support (+/-).
RSI and MACD either show a market with much higher to go or about to fail, because they are nowhere near overbought. RSI looks constructive if you can get past its intact downtrend.
Months ago we noted the top blue channel line in an NFTRH update and/or reports. It was a simple parallel line brought up from the lower would-be channel line and it had not come close to being touched. Last week SPX poked into it and reversed back below it. So our would-be brand spanking new downtrend channel possibility is still alive. AROON is still trending down, after all.
My original ‘call’ was for a test of the 2100-2200 support area and I have not given up on that in the least. Not until SPX takes out the theoretical top channel line.
All of this is nothing to say of the just plain ugly to the eye pattern formed from the bull killer blow off in January 2018 to today. A loss of current support could set things in motion to the downside. A hold of current support and well, it’s the Top-Test Express.
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