In last week’s analysis of the 6 months daily bar chart pattern of S&P 500, overbought technical indicators displaying negative divergences had hinted at a possible correction. The correction was a mild one – less than 2% from its lifetime peak of 1985 (touched on Jul 3).
Volumes were strong on down days, but the rising 20 day EMA provided good support. At the time of writing this post, the index has recovered most of its losses of last week. The mild correction should enable the index to rise to a new high soon.
Daily technical indicators are in bullish zones after correcting overbought conditions. MACD is below its signal line inside overbought territory, but has stopped falling. RSI and Slow stochastic dropped from their respective overbought zones, but stopped short of their 50% levels.
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