Daily S&P 500 – Feb 20
Click charts to enlarge
Chart 1 – Caution is required in this market with the RSI and RMI in overbought territory and the MACD crossing to the downside after a bullish run.
While the Slow Stochastic has been volatile just lately with not particularly good signals is has just cross above overbought again.
As I have been saying the market was overextended from a technical perspective.
Chart 2 – As regular readers will know we have been looking at this chart for months now but have recently changed the Fibonacci Projection study. We have now reached the very strong overhead resistance at 1,351. We are also nearly at the big resistance level at 1,370 which is the 2011 high.
Obvious support and resistance on this chart so I won’t bother to spell out the levels but around 1,140 is critical and a good break of this sets up significant downside. 1,010 is very much on the cards if this level breaks in a big way. The market has broken below the 1,140 level but it closed last week above that level, we need a weekly break close below that level to set up a move down to 1,010.
The most significant thing this week would be a good break above that 2011 high.
