S&P 500: Key Levels to Watch as Index Eyes Positive Start to the Session
2024.08.30 04:56
Monitoring purposes; Sold SPX on 8/19/24 at 5608.25 = Gain 8.14%gain; Long SPX on 8/5/24 at 5186.33.
Covered short 8/2/24 at 5346.56 = gain 3.18%; Short SPX on 7/31/24 at 5522.30.
Our Gain 1/1/23 to 12/31/23 SPX= 28.12%; SPX gain 23.38%
Monitoring purposes : Long on 10/9/20 at 40.78.
We are up over 26% this year so far; SPX up around 17%. Above is the daily SPY. The bottom window is the / ratio. SPY has been making higher highs and SPY/VIX ratio has been making lower highs and a bearish divergence suggesting a pullback is not far off (noted in shaded purple).
There are two gaps below that may be tested in the coming weeks; one near 545 SPY and one near 520. The shaded green area is where the TRIN closed near 1.20 and higher suggesting that area had panic and panic only forms near bottoms and support areas.
We are only looking for a sideways consolidation that may test the lower gap near 520 SPY before the next impulse wave-up begins. Sold long SPX on 8/19/24 at 5608.25= gain 8.14%; Long SPX on 8/5/24 at 5186.33.
Above is the monthly SPX going back to late 2019. A bearish divergence is present when the monthly SPX makes higher highs and the SPX/VIX ratio makes lower high (noted is shaded pink). July of this year in the SPX made a higher high than June but the SPX/VIX ratio made a lower high presenting a negative divergence.
We noted a support area on the chart above near the 5240 range and that area was tested this month and bounced back up. Another test is possible come September.
We updated this chart from yesterday and the positive divergence is still present, what we said yesterday still applies,
“It’s common for a divergence to show up near highs and lows in GDX. The bottom window is the cumulative advance/decline; the next higher window is the daily GDX and the next higher window is the cumulative up-down volume.
We noted bearish divergences in shaded pink where GDX made a higher high and both up-down volume and advance/decline made a lower high. We also noted a positive divergence in shaded green where GDX was falling to a new low where up-down volume and advance/decline were making higher highs (August through November 2022).
The current positive divergence is where GDX is matching its previous high and both up-down volume and advance/decline are well above its previous high which suggest the current rally should continue. The weekly and monthly charts remain on a buy signal as well.”
