Weekly time frame:

  • SP 500 has not been able to overcome the last obstacle (November peak) prior to the May 2015 all time high
  • The week ended with a Shooting Star. A short-term top could be in place provided last week low at 2073 is breached
  • If the Shooting Star is confirmed we have three potential targets: S1 at 2040; S2 in the range 2029 (50 wma) – 2020; S3 at 1989 (20wma)
  • In my opinion if a pullback is underway odds should favor a higher low, probably at the S2

SP 500 DAILY CHART

 

 

  • The scenario of limited downside and a continuation of the rally from the February low with a 3-wave up leg could result in an Ending Diagonal, which would conclude the entire advance from the 2009 low

 

SP 500 WEEKLY CHART

 

Daily time frame:

  •  SP 500 has carved out a potential reversal pattern (Rising Wedge)
  • A confirmation is needed by breaching Friday´s lod
  • If the reversal pattern is confirmed the pullback should bottom in the range 2020 – 1989

 

SP 500 DAILY CHART

 

  • The negative divergence of the RSI and the MACD suggest that momentum is waning

 

SP 500 DAILY MOMENTUM

 

  • The % of stocks above the 50 dma is still overbought and it is displaying a negative divergence

 

SP500 % OF STOCK ABOVE THE 50 DMA

 

  •  The ratio VIX/VXV has dropped below 0.800 increasing the odds of a pullback

 

VIX / VXV RATIO

 

  •  VIX has also carved out a potential reversal pattern (Falling Wedge). If the wedge plays out we have R at 16.81 and initial target in the range 18.58 (200 dma) – 19.14 (0.382 retracement)

 

VIX DAILY CHART

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