Wednesday, October 21, 2009 at 09:44AM | Asher Pinto
The rising channel on the hourly chart of the S&P-500 has finally broken and there are a potentially a couple of other sell signals on the chart as well.
Hourly chart of S&P-500 showing rising channel (now broken)
As the chart shows, the index broke the lower line of the channel, early on Tuesday and then proceeded to consolidate at a short distance below the lower line. This break can be looked at as an initial sell signal on the minor trend. The sell signal will remain in place if and only if prices remain below the lower line henceforth.
Additionally, the negative divergence on hourly MACD has now completed (see arrow pointing to the new failure swing low that completed the divergence). Moreover, RSI is now testing its centerline.
The centerline on RSI possibly is now the crucial aspect. Will the centerline continue to provide support or will it break? A negative centerline crossover on hourly RSI would put the cat amongst the pigeons and we'd be looking at a handful of sell signals on the minor trend that could tip the balance in the favour of the bears over the short term.
« Rising Channel on S&P-500 Hourly Chart (Update 5) »
The rising channel on the hourly chart of the S&P-500 has finally broken and there are a potentially a couple of other sell signals on the chart as well.
As the chart shows, the index broke the lower line of the channel, early on Tuesday and then proceeded to consolidate at a short distance below the lower line. This break can be looked at as an initial sell signal on the minor trend. The sell signal will remain in place if and only if prices remain below the lower line henceforth.
Additionally, the negative divergence on hourly MACD has now completed (see arrow pointing to the new failure swing low that completed the divergence). Moreover, RSI is now testing its centerline.
The centerline on RSI possibly is now the crucial aspect. Will the centerline continue to provide support or will it break? A negative centerline crossover on hourly RSI would put the cat amongst the pigeons and we'd be looking at a handful of sell signals on the minor trend that could tip the balance in the favour of the bears over the short term.
So keep an eye on it.