SPX Standard and Poor's 500 Index
Weekly charts:
Stochastics have spent the last 3 months in the overbought area. A false buy and sell signals were issued as the indicator bounced between overbought and oversold areas.
The Bollinger Bands are starting to close a bit. The index is pulling away from the upper band. Over the past year and a half, the index has bounce twice off the Center of the band and dropped below on the third try. The index is about to make a third selloff challenging the center of the bands and make contact with the lower band in the 1200 area. This is bearish
MACD has been declining since the indicator made a high and SELL signal in '04. This is a bearish divergence withthe market that has wiggled higher. This is a big warning sign, since the condition has persisted for nearly 2 years. The MACD is about to issue a SELL signal.
The RSI has been declining since the indicator made a high and SELL signal in '04. This is a bearish divergence withthe market that has wiggled higher. This is a big warning sign, since the condition has persisted for nearly 2 years.The Stochastic is about to issue a SELL signal.
The index remains above the 50 week average. No real change to the trajectory has happened. Volume has dried up just before the market tops in '04, march '05, and sept '05. The volume has been drying up over the last 6 weeks, signaling some sort of top and 5 to 10% decline.
The Elliott waves count is very difficult in this choppy market. The best count is a WAVE B triangle that started in March '03. The triangle is in Wave E. There is a little throw over as Wave E is just above the trend line connecting the tops of Wave A and C.
Daily charts:
Stochastics have been in the overbought area for the last 2 weeks. It has issued a SELL signal
The bollinger bands continue to widen. The index is trying to pull away from the upper Bollinger Band. Friday's early rally didn't have enough to tag the upper band. The price should drop to the 1260 the area of the lower band.
The MACD gave a sell signal late November '05. Since then the MACD has given only false buy signals. The MACD has drifted lower as the index rose. This divergence is BEARISH.
The RSI gave a SELL signal in Nov '05. The RSI has drifted lower since despite the rise in the index. This is BEARISH.
The past 4 weeks shows a possible head and shoulder in play. The top of the right shoulder is being formed. The neckline is 1278. The 50 day moving average is rounding over. Both area bearish.
The index has been too choppy for accurate Elliott waves on the daily scope. The rally in choopy trading itself signals a top being formed.
The indicators for both weekly and daily charts paint a bearish picture. The SPX is still forming a topping.
Now would be a good time to exit the market and wait for confirmation of WAVE C to start.
