Subject: Fwd:(Makor) Tech View S&P 500 Index (2,102 last) - waiting for a break below 2,067-72 to signal a top in place, tgts are 2,025, 1,885 & 1,730
Summary
Bottom line: while below 2,134-2,138 I continue to expect a dip correction. My targets for a move lower would be 2,025 which is the potential bearish H&S pattern target on the daily chart), 1,885 which is the October2014 low and the 23.6% Fibonacci retracement of the 2011-2015 bull cycle and possibly 1,730 which is the 38.2% Fibonacci retracement of the 2011-2015.
Strategy: Short 2 unit from 2,119, target 2,025 & 1,885 with a stop on a daily close above 2,140
Daily chart
· The Index is struggling to take out the 2,134 all-time high and continues to put pressure on the 2,067-72 support area.
· A break below the later would argue for a H&S top in place, the pattern target is 2,025.
Weekly chart
· The Index has been moving higher without any 'healthy' correction Since October14.
· The Index has been drifting higher with negative divergence between price & RSI since July14. This divergence means that the upside is losing momentum and that from a risk/reward perspective and is a warning sign about chasing the uptrend.
· One more thing worth of note is the continuing decline in the percentage of stocks trading above their 200dma, as of today the percentage of stocks above the 200dma is below 60% and the Index is just 1.5% from its all-time-high. This interesting factor highlights the disappointment that investors have in stock picking and makes it nearly impossible to beat the Index performance.
Monthly chart
· The 2,138 level represents the 161.8% projection of the 2007-2009 sell-off, so far the high of the cycle is 2,134 and is pretty close to this resistance level
· From a time perspective, the distance between the 2000 high to the 2007 high equals the distance between the 2007 high and the 2015 high. Back in 2007 we got a major sell-off and given the fact that the technical structure is pretty similar in terms of overbought technical conditions one should be pretty caution at this point of time
Daily chart
Weekly chart
Monthly chart