Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Here is an updated S&P 500 chart. For those who use Fibonacci levels the bottom early this week was a 23.6% retracement of the November to February move. That is not shown on stockcharts.com but is the mildest of retracement levels (38.2%, 50% and 61.8 being the most oft cited). I don’t show the Fibs below but just want to note that. You can see on the S&P 500 chart the ascending channel that was broken now is serving as a bit of resistance. Also I want to note the RSI measures at the bottom of the chart – one can see how much weaker they are now than during the heart of the rally; that’s a negative divergence. We will see if it matters in the coming weeks. The yellow shade is the head and shoulders pattern I am citing until it is rejected (by a new high being created). In this day and age it will only take one gap up to erase that pattern but I am throwing it out there.
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