There are a couple strong signs that we are hitting some resistance and that we are about to see another move to the downside. First, the S&P met resistance at the recent Feb high and then retreated. The other sign that is showing a potential slide is the MACD. It has started to curve down from over bought territory and that is rarely followed by a move higher. Take a look a the chart:
On top of that, we have the VIX ease up a bit but it is also showing a MACD signal that it could spike. Moves up in the VIX are create a strong environment for a move down.
There are no guarantees with the market but when multiple signs point in a certain direction, it demands attention. We have talked about tools that can be used in a dropping market along with some ETFs that can be useful. You can read it here.
If you are looking for a great way to confirm where the market momentum is, check out Joe Duffy’s Little Black Book of Momentum Set-Ups. You can grab it here for free.
Keep learning and trade wisely,
Market Wealth Daily