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S&P 500 technical analysis

SPX Tech analysis by Simon Kazinsky on 05:20 August 09, 2016 EST



After breaking above 2,037 our previous call for a multi year high in the index set last year was broken. Indeed, the top lasted for more than one year but the correction was not as large as anticipated.

Therefore, I have placed my bearish view for stocks on standby until, at least, the present move up gives signs of exhaustion.

As can be seen on the first chart this would imply breaking below the supporting moving average now close to 2,050.

The following chart shows retail positioning is still heavily bearish albeit decreasing. Retail traders as a whole have been able to pinpoint highs and lows very accurately and hence this indicator is worth following.



Finally, here is bearish count under the Elliot Wave principle. If this scenario was correct we are still in the process of forming a new top and break below 2,000 would provide confidence that the count is correct.



On the meantime is preferible to keep the powder dry.


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