SPX has had a great run from the "bottom" of the corona virus market drop, to many surprisingly so. While there may be fundamental and global economic, fed stimulated reasons for this, let's take a look at the technicals and see if this momentum can hold.
On the 4 hour chart we see that SPX is topping out and running out of steam; while the price moved higher in the past few weeks, VI silently fell below it's moving day average and is now well below it; RSI is making lower highs and lower lows as price moved higher and sideways. We can also see that on the daily chart, the VI lines are about to cross, and while this can reverse, it will be more telling when the RSI falls below the 50 level (right now right around 50, slightly above on the daily) on the daily, signaling a trend and momentum change.
We will have to wait and see how the week ends with the Friday session; while the poor jobs number and banks rallied the markets in the hopes of more stimulus, what the week ends can be telling of if we will have a momentum change and the markets are about to run out of steam, or if it will continue, at least for the near term, sideways and consolidate to move higher at a later time, with better news and outlook. In my opinion, in order for the markets to truly recover and move higher meaningfully, it will have to retest the lows that it bounced off of earlier in the year.
Stay safe, and have a nice weekend everyone~!
On the 4 hour chart we see that SPX is topping out and running out of steam; while the price moved higher in the past few weeks, VI silently fell below it's moving day average and is now well below it; RSI is making lower highs and lower lows as price moved higher and sideways. We can also see that on the daily chart, the VI lines are about to cross, and while this can reverse, it will be more telling when the RSI falls below the 50 level (right now right around 50, slightly above on the daily) on the daily, signaling a trend and momentum change.
We will have to wait and see how the week ends with the Friday session; while the poor jobs number and banks rallied the markets in the hopes of more stimulus, what the week ends can be telling of if we will have a momentum change and the markets are about to run out of steam, or if it will continue, at least for the near term, sideways and consolidate to move higher at a later time, with better news and outlook. In my opinion, in order for the markets to truly recover and move higher meaningfully, it will have to retest the lows that it bounced off of earlier in the year.
Stay safe, and have a nice weekend everyone~!