Monday, November 28, 2016

Currently Near Probable Momentum Peak In Stocks

As of today in SPY, the 14 period Money Flow Index turned down from above 85.  Also, the daily lower bollinger band turned up after an expanding move in the recent run up.  Both of those signs are typical of the end of the main trending part of a market move.

From my perspective it seems most likely that stocks will retreat slightly or chop around but still end up pushing to higher highs in coming weeks.

Currently the SPY etf is setting up for a major multiple time frame bearish divergence.  Both monthly and weekly MACD signals are in a bearish divergence at the recent highs.  The daily MACD has not matured to a bearish divergence yet.  The better set up for a possible intermediate top area would be for a mild decline in SPY, followed by a move to new highs with a daily time frame MACD bearish divergence.  The daily weekly/combo of bearish divergence readings in itself has had a forward negative skew in SPY, though not a huge one.

Seasonally stocks have historically tended to hold up into the Christmas/New Year's time frame.  It doesn't seem to me to be a solid bet against the uptrend at this time.  But the recent upwards move seems to be mostly out of steam for the short term.  I do not see any reason to bet on further advances unless there is a compelling short term sell off which occurs over the near term.


No comments:

Post a Comment