Action in the S&P 500 has been very volatile since late June. After hitting highs in May, the 50 day moving average became resistance, and the market retraced. After a bounce, the 50 day become resistance again, and the market pulled way back.

 

This price action has created what is known as the "death cross," which is when the 50 day MA crosses below the 200 day MA. Almost immediately following the cross, the market began to rally. Having established a rising channel, we have seen price touch the bottom line of the channel 3 times.

 

We are at a point today where the previous high has become resistance, and the rally within the currently rising channel looks to be rolling over. It is statistically more common for channels to fail at this point, than any other.

 

Combine this with red Monthly and Daily Trade Triangles, and a green weekly triangle (indicating conflict, and that you should be out of the market it), and divergence between price and the slow stochastics, and you have a recipe for a failing rally.

 

There are a couple critical  price areas to be following this week, and I show them to you in this video, so watch it now. In the video, you will see the technical indicators, as well as the Trade Triangles, which will dictate how to trade this broad index over the coming weeks.

 

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