Not much new to add but it appears the rally is in its final throws. Volume has declined more and more on the up days suggesting little momentum building to any upside movement. The index also rallied to just above the 61% fibonacci retracement level which is right in my reversal zone and a common place for corrections to end. As you can see on the chart, the count for the waves composing wave C of 2 are looking complete, or near complete. Also momentum indicators are starting to pull down. But in this regard, we will usually see a divergence of new highs compared to momentum indicators before a top occurs. This means that price could make one more new high while momentum indicators like the RSI, stochastics, MACD, etc. do not make new highs with price. This divergence is typical in 5th waves, which we're probably in right now. So I wouldn't be surprised to see one more up-down movement in the S&P to complete wave v of C of 2. With that said, this rally is getting quite long in both price and time so my patience is running out for a top and reversal to occur and still have confidence in this wave oount. Wave 3 needs to get going early next week.
S&P MACD Momentum
I thought this MACD chart of the hourly S&P is interesting because it shows the MACD histogram of when the moving averages start to cross down over each other. You can see that for the most part, when the index was in an uptrend and the histogram showed the moving averages were crossing down, making the histogram blue, the S&P would sell off a bit in the short term (see red arrows in chart). We now have some blue bars showing on the histogram telling us the moving averages have crossed down which suggests at least a short term decline is coming. But since we're looking for a wave 3 to start, it may be more than just a small decline at hand.
My currency positions remain the same, please see my last post for trade details (click here for that post)
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PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
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