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  • S&P 500 Demystified

    Ref. Chart A: In June the S&P 500 Index crossed the 50-Day SMA, and then the 100-Day SMA, indicating an upswing which was subsequently observed. The 50-Day SMA crossed the 100-Day SMA in August indicating a strengthening bullish signal.

    However, the S&P Index today moved below the 50-Day SMA indicating the possibility of a bearish trend in the near future. The 200-Day SMA is also seen to be trending towards the 100-Day SMA, a bearish trend.

    Chart A

    (click to enlarge)

    Ref. Chart B: The RSI indicator has a value of 50.43 well within the overbought-oversold range. The TSI indicator which is a high-responsive variant of the RSI is in a downswing and below the moving-average, indicating a bearish signal.

    The MACD had a bearish signal-line crossover around end-October, a sell signal. Though MACD is above the center-line but is trending downwards and may result in a bearish crossover. The MACD Histogram has been recently gaining momentum in the negative direction, a strong sell signal.

    Chart B

    (click to enlarge)

    Ref. Chart C: The stock price fluctuated between the upper band and the middle line (20-Day SMA) since July, and recently crossed the middle-line touching the lower band, indicating a strong possibility of a trend reversal.

    Chart C

    (click to enlarge)

    Ref. Chart D: S&P 500 has a support level at 1428, and a resistance at 1465. In case the S&P Index breaches the support level tomorrow or in the next few days, it increases the possibility of a further downswing.

    Chart D

    (click to enlarge)

    In conclusion, technical indicators for S&P 500 Index indicate a Bearish trend in the near future.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SPY, S P 500
    Oct 15 9:40 PM | Link | Comment!
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