Now that the month of May is full, you possibly can see from the month-to-month chart beneath that a big triple high has fashioned on the SPX, which is, in actual fact, because of three bearish candle formations on this timeframe (particularly, a darkish cloud cowl, adopted by two bearish engulfing candles) — albeit it on successively increased swing highs — after overshooting its higher fringe of a long-term ascending regression channel and reaching its +three commonplace deviation degree.
Its goal, if it continues to drop, is the decrease fringe of this regression channel across the 2400 degree, which additionally occurs to converge with its 50-month transferring common (crimson).
All three technical indicators, the RSI, MACD and STOCH, are signalling additional weak spot forward.
Price on the next month-to-month chart of the SPX: ratio closed the month just under the 150 Bull/Bear Line-in-the-Sand degree.
Note that there are three bearish engulfing candle formations on this ratio on successively decrease swing highs…a bearish divergence from the month-to-month swing highs on the SPX, as famous above.
The Momentum indicator (MOM) closed beneath the zero degree, hinting at additional weak spot and rising volatility forward for the SPX.
While we might even see some shorter-term makes an attempt at weak rallies, I believe the SPX will finally attain the 2400 degree, or decrease…offered that the SPX:VIX ratio stays beneath 150 and that MOM stays beneath zero…two gauges to observe on this regard.
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