yesterday i mentioned that any additional push higher in the SPY would likely form negative divergence on the 60 minute MACD. here’s the updated chart showing the revised resistance zone as well as the potential negative divergence. although the MACD has made a lower high while the SPY has made a higher higher, which is considered to be negative divergence by many, personally i don’t consider that divergence confirmed or “official” until the MACD fast line crosses below the slow line (bearish MACD cross-over), which will happen if prices turn down soon.
the QQQ 60 min MACD is also lagging price on this move higher although the Q’s are still just a hair shy of making a higher high in price (only 12 cents below the 7/5 reaction high as i type). therefore, if the Q’s manage to peek it’s head above that level and reverse shortly after, we will also have negative divergence confirmed on the 60 minute frame there as well. small & mid-cap stocks are lagging quite a bit in price and are still quite a bit below their 7/5 reaction highs and i doubt they be able to take them out before reversing and turning lower. i’ve added significant short exposure on the post-opening move higher this morning and i am expecting prices to make a substantial reversal soon. however, this market is far from offering any clear buy or sell signals as the technical picture and price action continues to remain somewhat obscure at this point. my being fairly net short here is as much of an intuitive trade as it is based on the charts so DYODD and if you are unsure on how to be positioned here, consider watching from the sidelines until a more clear technical picture develops.