We saw the S&P break through a key point of resistance last week and continue to move higher. After lingering in a tight range for a week prior it pushed above a recent high to keep the rally alive. This morning things are looking a little less favorable for the run to extent.

For starters, we are seeing a similar pattern we watched play out back in Feb thru April. In that pattern the last hoorah before the next leg down made it above prior highs before failing pretty hard.

We are also seeing the MACD move pretty high into overbought territory. It is possible it can hover there for a while but it is not at all probable.

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There is one last sign we are going to be watching closely today. The VIX is right at its 10 day moving average. It has been hanging just below it for a while now but if it manages to move above that line, it is a very strong sign we could see a breakout to the down side.

Lee Gettess has some amazing momentum tips that help confirm when a run like this is getting exhausted. Be sure to check them out here.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily