Tuesday, March 10, 2015

SPY MACD and Money Flow Index 3-10-15

money flow index MACD with no divergence
Click on Chart to Enlarge

This hourly chart of the SPY etf shows MACD and money flow index below the chart.  Also there are some vertical lines also which represent the time of the recent rally from low to high in February and that same time amount projected forward from the February high.  If price manages to fall another 4% by March 23, it would move below the February low and would break support but also would retrace the recent rally in less time than the rally took to form which would be a solid logical indication from price action that a pattern completed at the February high.

At this point I don't really have an opinion of whether that is likely, but given the information covered in the stock market top video I made this past weekend, it is on my radar.

The indicators below the price chart show that the money flow index is in the oversold region, but without bullish divergence.  Since it includes volume in the calculation, it tends to diverge and lead prices significantly at important turns.  So this suggests to me that we will see at least a few bars of price action on this time frame with lower lows.

The MACD indicator is relatively oversold and is also not displaying a divergence at the time of this typing.  So, while the possibility is certainly reasonable that prices rally later today and a short term low is formed, a low close today after a gap down may indicate at least a few more days of lower lows in or order to create a more classic bullish divergence in the hourly MACD.

Until otherwise posted here my vote is for generally (and possibly sharply) lower prices in the next several days.


No comments:

Post a Comment