$S&P 500(.SPX)$
The divergence with stock participation persists, as the percentage of stocks above their 20DMA has dropped to only 50% of the index constituents.
Greed sits at 64, and the indecisive price action suggests a significant move is imminent.
The S&P 500 $S&P 500(.SPX)$ rallied for three consecutive weeks when it bounced, gaining over 3% each week. Such an occurrence is rare in the stock market; the move was so rapid that apathy is the common human reaction, similar to what is observed during a breadth thrust signal.
Today, the market is consolidating after this sharp move. Considering the high expectations seen across social media and mainstream news for a decline, I am providing a technical study of these types of events in order to have an objective perspective.
Premium subscribers who have followed my analysis over the past two years know that I do not blindly trust statistical tables. Instead, I study the charts and assess common patterns to reach a conclusion.
This approach successfully anticipated several key moves:
the 2024 pullback to the 40-week moving average in the midst of euphoria (triggered by the Japan carry trade in August); a major correction to $4,800 after touching $6,109 that I projected at the end of 2024 (which materialized in March and April 2025 after reaching $6,147); and the bullish continuation during the period of apathy in April and May 2025, which evolved into new all-time highs.
Most recently, in March, during the recent correction, I posted a study of previous bull markets highlighting that a major top was unlikely to be in, based on a comprehensive analysis of historical pullbacks and corrections.
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