SPX Top-Test & Megaphone

Well, the short answer is that SPX is still on a top test and so far at least, it’s not passing the test. There’s a gap down lower at the EMA 20 (2817 and rising). Pass the test and then the Megaphone comes into play. Fail the test and that little tick above resistance will have been the bull trap we’d been allowing for at point 5.


We’ve been noting the gappy rise each week in NFTRH and how these things were very likely to fill either sooner or later. Indeed, NFTRH 550 speculated that it would probably be healthier to get it done sooner. The top gap is coming into view here as is the old 2815 resistance that loaded the top-test when it was broken. It’s now of course support.


The divergence between VIX and inverse SPX was first noted in NFTRH 549 on April 28th. Here is a screenshot of how it was presented.

And so dialing ahead to today it did indeed mean “Warning”. Now, was it warning of the routine pullback we have thus far or something more virulent? Trying to answer that would be guru-speak. But the divergence has manifested and we’ll just have to see what the intensity of what it signaled will be.

spx & vix

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