Wednesday, 5 August 2009

Short term technical sell signal on S&P 500



The chart above shows the 15 minute action on the S&P 500 for Wednesday August 5th and displays a co-occurrence of short term sell signals indicating that a correction in this time frame is beginning. [Clicking on the image should produce a larger graphic which will be easier to read]

The indicators are as follows:

1. Tuesday's higher prices above 1000 were diverging with the momentum and RSI indicators which as the arrows reveal were moving in the opposite direction to price.
2. There was a classic Ichimoku crossover of the 9 day line crossing the 26 day line as indicated on the chart
3. This crossover had the appropriate context i.e. the green cloud lies below the crossover.
4. The initial target in this time frame is the base of the green cloud approximately 995 on the S&P 500 cash index.

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