Although the action this week did not inflict any serious damage to the July-Januar uptrend in the S&P 500, it was a disappointment nonetheless. That’s because the index made a new multi-year high and then reversed to close below both last week’s close and last week’s low.

Furthermore, let’s notice that the weekly RSI momentum gauge did not confirm the new price high, and instead leaves behind a glaring “negative divergence” that serves as a very big warning that the weekly uptrend is running out of gas (along with the daily uptrend). Clearly, the bulls are on notice. Caution is the word going forward.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.