Option Investor
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SPX is getting closer to the downtrend line from November at 848. The short-term charts are overbought (which could stay overbought) and the daily chart is showing a slight bearish divergence against last week's high. The combination of a retest of the broken uptrend line from the March low (shown more clearly on the 60-min chart posted earlier) and the downtrend line from November, along with the overbought conditions, could be a show stopper for the bulls soon.

SPX daily chart:
[Image 1]

If today's rally is based on the FASB ruling for the banks why aren't they participating more strongly since this morning's initial high? As Linda commented earlier, they may be giving us a hint that the rally in the broader averages may not be getting the full support they need. The Banks pulled back immediately from the open and have not been able to rally with the rest of the market. Follow the money.

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