Retracement in the immediate term. The S&P500 index has been trending steadily higher within the bullish channel (purple) depicted above and is currently seen hovering near the channel’s upper boundary. Notice that, as the index continued to record higher highs along the upward trend, MACD was trending downward and recorded lower highs in the same period. This suggests that the S&P500 index is experiencing a bearish divergence, or simply put, diverging from the MACD, which brings us to a deduction that the upward trend was unhealthy. In addition, the RSI reading is also found approaching 70, a level at which the index would be deemed “overbought”. Along with these findings, we anticipate the index to retrace in the immediate term towards the lower boundary of the channel.
Follow us on facebook now at fb.com/TaurusBrownCo to get updates on the chart readings or visit www.taurusbrown.com.
Follow us on facebook now at fb.com/TaurusBrownCo to get updates on the chart readings or visit www.taurusbrown.com.