Last week I discussed with you the critical situation in U.S. stock market. I showed you several signs of weakness that were suggesting the top was not in, but that one was fast approaching. And while both Nasdaq 100 and S&P500 remain well abv the rising 100-day and 200-day moving averages and the Short-Term trend on daily chart is still up for both indexes, we now have further evidence that important tops are likely in place.
Last week S&P500 advanced to new yearly high and new high for the bull market from early 2009 low. But then on Friday it reversed lower and today continued lower for most of the session. That is bearish. At the same time, Nasdaq has remained well below its March top. When Nasdaq 100 is lagging, that does not speak well for the broader market as well. Remember the situation in year 2000!!
And many sectors like biotechs and internet stocks (and social media stocks in particular) that have been leading market higher are now in strong downtrends. That’s another strong sign that either Short-Term tops in S&P500 and Nasdaq 100 are already in place, or we will only see marginal new highs later this month only to be followed by trend reversal to the downside. So, I am now turning bearish here against 1910 in S&P500.
The only bullish factor is that the trends on daily and the weekly chart of $SPX and $NDX are still higher and the fact that the Advance-Decline line is still advancing. But everything looks bearish to me….
To confirm the bearish outlook that I am suspecting now, we need a move below the early Februarly lows. That is, we need a close below the 1730 level in S&P500 index.
Trade with the trend!
Alexander
http://www.Trendrecognition.com
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