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100 DAY LINEAR REGRESSION: The SPX is currently experiencing rejection around the upper second standard deviation line of its 100-day linear mean at 4009.72 with the lower end of the probable linear range coming in at around 3531.26 (-2SD). The outlier (+3SD) linear range is 4199 – 3331. The Pearson’s R^2 for the 100-day linear mean is 0.83 indicating a strong central tendency for signal to revert toward its linear mean at around 3760.
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VOLUME FLOW INDEX (VFI): The volume flow index is a fixed, cumulative volume index based on the last 130 days. Signal is trending upward but is well below the zero line at -15.7 and is still firmly planted in the negative volume trend side of the histogram.
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MACD-X: The macd is currently indicating a bullish trend with decently broad mouth divergence but it should be noted that signal is showing signs of peaking/flattening out.
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RSI: The RSI is currently firmly planted in the bullish end of its range but looks to be topping off into a flatter path in a similar manner as the MACD.
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HISTORICAL VOLATILITY: From a historical volatility perspective the SPX is coming out of extreme (red) levels of volatility and is currently hovering in high (orange) levels of volatility at the 86th percentile relative to the last 365 days. It should be noted that the highest levels of volatility (100th percentile) were recently achieved in June 2022 for perspective.
SUMMARY: As the Fed meeting approaches, the technicals show a market at an inflection point. In the price box we have signal unable to breach the upper, 2ND standard deviation line necessary to begin reversing the downward-trend. The flattening signal angles of both the MACD and the RSI illustrate a market that is trying to decide whether or not to sell the rally and despite a moderate upward trend, the VOLUME FLOW INDEX (VFI) is hardly indicative of bullish conviction from a volume standpoint. The recent decline in historical volatility below the 90th percentile is also not substantial enough to be indicative of anything more than a market taking a pause before deciding whether or not to chop more wood.