Two negative signals that the overall markets are weak:
The S&P500 @1060 ($SPX), the Dow Jones Industrial Average @9742 ($INDU and the Wilshire 5000 Composite Index @10987 ($WLSH), technically are all having:
1. MACD "negative divergence," and
2. A Bearish moving average crossover.
This can be seen at www.stockcharts.com and is taught at the Chartschool at that website.
1. A MACD negative divergence is when "the security advances or moves sideways, and the MACD declines. N.D. are probably the least common of the three signals, but are usually the most reliable, and can warn of an impending peak."
2. A Bearish moving average crossover "occurs when MACD declines below its 9-day EMA (the signal line)." This is the most common signal for MACD. (The third signal is the "Bearish Centerline Crossover.")
These two negative signals together are a powerful indication that the overall markets have slowing momentum and should serve as an alert to monitor the technical situation for further clues of weakness.
