S&P 500 daily MACD tries negatively crossing

Darren Chu, CFA Tradable Patterns

The S&P500 (ES) reversed more than a third of last week’s gains off its Monday low on Friday, and is vulnerable this week to a retest of last week’s low. Before bears get excited, ES will need to break below the weekly chart upchannel support. Nevertheless, the lower January low and high versus the December low and high are increasing chances that the powerful Bull Market extension from October 2022 may be exhausting. The monthly MACD histogram on the continuous contract (as can be seen on tradingview.com) is steadily sloping down and weighing on the still slightly rising MACD blue line. Volatility is likely to increase as early as Tuesday with the US Fed Chair Powell comments, and certainly by Wednesday with the US CPI and further Powell remarks. Thursday, watch for the US PPI and unemployment claims, and on Friday for the US retail sales. The weekly and daily RSI, Stochastics and MACD are tiring or steadily sloping down. I am looking to enter short in the red zone (of the daily chart), targeting the green zone for Friday. The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I sometimes set my stops tighter).

Weekly/Daily/4hr

Author

Darren Chu, CFA

Tradable Patterns

Darren Chu, CFA, ex-Intercontinental Exchange | NYSE Liffe, TMX Group, CMC Markets, is the founder of Tradable Patterns – a publisher of futures/FX technical analysis on Bloomberg, LSEG (Refinitiv) and Factset.

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