The S&P 500 had its winning streak broken yesterday. Today, what I am watching for confirmation is a bearish divergence that hasn’t happened nearly a year. For the first time going back to April 2012, the S&P 500 cash index (SPX) took out the previous day’s highs. This created a potentially bearish non-confirmation between the S&P 500 cash index, which made a new 52-week high, without the S&P 500 futures doing the same.
Short term, if the S&P 500 cash index and the S&P 500 futures can’t make a new high together – along with the small and mid caps because we have the same situation there – then we are facing some real trouble and price declines just like we saw in early 2012 when these same events all happened.
Once we see how this unfolds and whether we get the different confirmations that technicians like myself will be looking for, then it will make future short-term price movements and projections in the upcoming updates much more precise.