Euro/USD Daily
The Euro/USD pair is at its daily upper bollinger band and below resistance in what could be a symmetrical or descending triangle. The daily stochastics is back in overbought territory at a lower high. The shorter term 2 hr chart is showing bearish divergence on the MACD. So the set-up seems plausible here for a top with a technical triangle breakout chart target to slightly below the December lows in the Euro. A move above the early April highs would negate this scenario. Stops could be placed at that level if trading the triangle pattern for a downside move from here.
SPY Hourly
The S&P 500 is back to just under the unfilled gap at 139.80 which is also a harmonic resistance zone. The hourly MACD and stochastics are overbought but may need to create some bearish divergence before a downtrend develops. On an objective basis thus far, the rally off the April lows has taken over twice as long as the decline from the April highs. So the downside still has the "power" on that basis. It is reasonable to expect further declines to new corrective lows on that basis.
Equity Put/Call Ratio
The equity put/call ratio is signaling a short-trade set-up here for a short to intermediate term downtrend. The 10 day average dropped below the 63 day average as of yesterday. This is occurring with the 63 day average having recently turned up indicating a possible intermediate downtrend. A similar occurrence happened a year ago in early April as the market was moving into it high prior to a major correction.
The 252 day average is still moving higher ever so slightly which is indicative of a long term price downtrend typically. This is despite a major rally in stocks. So this may be a divergence of sorts with bearish long term implications. But that remains to be seen.
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