S&P 500: Momentum Divergence On Daily Suggests Major Drop

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S&P 500: Momentum Divergence On Daily Suggests Major Drop

By David Spurr on June 12, 2009 | More Posts By David Spurr | Author's Website

Price is still fighting the 200d moving average. None of the averages have crossed the 200d moving average.

I think we’re getting ready to break down.

There is some huge momentum divergence on the daily chart, which is suggesting that the S&P 500 index (^GSPC) is due for a major drop. You can see that we hit an intraday high Thursday, but momentum was nowhere near making a new high.

The US dollar broke out of the downtrend and then retraced to 61.8% on lighter volume suggests that perhaps the dollar is starting to turn into an uptrend. RSI recently came up off the bottom. Both of the prior times, USD was in for a nice rally.

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