Market updates & trade ideas continue to be light as the technical picture for the US markets remains unclear. My preference continues to be to keep things light for now and with the $SPX trading at a new all-time intraday highs, I wanted to reiterate my thoughts that a correction/pullback in the $SPX is likely to begin in the very near future. New highs, although considered a bullish technical event, are almost always followed by a correction when price has formed negative divergences against the MACD & RSI. The current divergent high in the S&P 500, which is the fifth divergent high in the last two years, is just one more reason why the $SPX is likely poised for a correction. Of the previous four divergent highs shown on this two year daily chart, all four resulted in a correction ranging from about 4% to 8%. It is also worth mentioning that the intermediate-term trend on both the Nasdaq Composite & Nasdaq 100, as defined by the 20/50 daily ema pair, remains on the sell signal (bearish) which was triggered just over a month ago. However, any significant upside in the Nasdaq over the next several sessions would likely flip the intermediate-term trend back to bullish. All trends (short, intermediate & long-term) on the $SPX remain bullish at this time. All in all, not the best time to be heavily positioned long or short at this time although things can & often do change quickly in the markets.
$SPX daily May 13th