« Negative Divergence Developing on Weekly MACD »

The weekly chart on the S&P-500 is our new 'Chart In Focus.'

S&P-500 Weekly Chart

The index has had a great run over the past several weeks. The index hit a low of 1050 in early-Feb and has moved to as high as 1170, this week. A significant development on the Moving Average Convergence-Divergence (MACD) indicator on the weekly chart, threatens a potential reversal to the level of the lows in February, if not to lower levels (perhaps as part of a larger correction, on the level of the major trend).

The development we speak of is a potential negative divergence on MACD, as you can see on the chart. Now it is important to note that this signal is still in the initial stages. A new failure swing low (a breaking of the annotated thin line) is needed in order for the signal to complete itself. If the signal is to be confirmed, it will take place over the next couple of weeks.

So we'll be keeping an eye on the chart and providing updates on this 'Chart in Focus' every few days, until the signal is either confirmed or reversed. Stay tuned!