Technicals look sick right now and internals are confirming this down move in the S&P 500.
When looking at the technicals on the 30-minute chart, the MACD and RSI are showing extreme exhaustion…it’s a point where we could see one more push up but the downside looks like the most probable scenario. Also today there was a bearish cross on the daily MACD, again, it could push back up for a quick squeeze…but not likely.
My current count on this market (Elliot wave analysis) has us already completed the end of wave 5 of (3) on February 1st. After a completed five waves, we need to look for a corrective move (counter-trend)…. and we may have already started that move. Today, it looked like we completed five waves down, completing wave 1 of (4). This leaves us with a wave 2 bounce before the biggest drop in a wave 3 of (5). If this count is to follow through, we will be seeing this correction end near the 1460 level. A hard break of 1490 should confirm that this correction is in full force…
Internals are currently confirming this markets downward move. EEM (Emerging Markets), XLF (Financials), XLK (Technology), XLE (Energy), XLB (Materials) and DJT (Dow Jones Transportation Average) all had big down days today, and have struggled in the past week to hold up the S&P’s upward push. In the past this is a tell-tell sign that something is developing in the market and it wants to show a different face. All of these have bearish crosses on the daily MACD, besides XLE… is that a bearish sign or bullish?! To me that’s bearish, I don’t see how we are going to push up past 1525+ without all of these sectors joining the party. A 20-35 point pullback would be healthy for this market, to help unwind these indicators to push up through 1525+ with force and strength.
Author: Peter Nitso
Twitter: @PeterNitso
Email: pnitso@yahoo.com
