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S&P 500 Mid Month Update

 by David G. Hawkins

Here at mid month I update the short term (daily bars) and intermediate term (weekly bars) charts.

Short Term

The first chart here is the daily bars chart updated through May 13th.  We see that a pullback started on May 3rd, and now has become a consolidation, bounded approximately by the new S1 and R1 curves.  If it breaks out to the downside, we have the ladder of support curves set up below the current price range, any one of which could stop a new decline.  It’s interesting to note that the S4 cal curve and the level of the weekly S3 curve (whose level is copied over here from the weekly bars chart) are now coalescing at about 1304, so that should be a very strong support level.

Intermediate Term

The second chart here is the weekly bars chart.  There was a minor pullback on the week of May 21st, so I’ve launched S4 from there.  On this update, I’m calling attention to the upper and lower panes on this chart which display the Money Flow Index (which really is the volume weighted RSI) and the Volume Weighted MACD because both of these are now showing strong negative divergences with price.  This indicates that this uptrend which started late last summer is now weakening behind the scenes.  Even though the TopFinder that is tracking this uptrend on this weekly bars chart is only about half done, I’m doubting if this uptrend will actually last that long.  See my May 1st post in which discusses this TopFinder vs. the one that is displaying on the monthly bars chart.  That monthly TF is now 71% done, and looks like it has only two or three more months to go.  With weakness now showing up on the weekly bars chart’s Money Flow Index and Volume Weighted MACD, it is more likely that the projection of only a small number of months to go is the more valid one.