S&P 500 Sell Signals

S & P 500 has received sell signals and is now in a downtrend. I will use rebounds to go short in the market.

S & P 500 has recently slipped from its previous upward trend. Instead, the S & P 500received lot of sell signals and other signs of weakness. Last week also resulted in a decline of 2% for the S & P 500.

So far this year, however, the S & P 500 has risen by about 9%. S & P 500 has also now entered a more volatile phase than earlier in the winter. This tendency for more volatility will probably be strengthened as we come into an intensive companies reporting period.

The long trend for the S & P 500, defined as the slope of the 200-day average curve is slightly upward. The short-term trend is, however, since last week downward.

Stochastic indicator shows that the market is oversold. The market may be oversold for a long time if it got into a strong trend so it's not a buy signal in itself. This indicates, however, that the S & P 500 is now relatively easy to get up recoil. These smaller gains can then for example be used to enter short positions at more favorable levels than otherwise.

S & P 500 got sell signals when the index broke an uptrend line that gave support at about 1400 and when the index went below the support levels around 1387 and 1378. Previously, the S & P 500 also had a negative divergence in the Stochastic indicator that strengthen the signal value of these sell signals.

We are now aiming for that S & P 500 sooner or later should test the support level at about 1340 and probably also the one at 1295.

Should the S & P 500 now would bounce upwards the index has resistance at about 1378, 1387 and about 1422. The psychological level of 1400 could also be considered as a resistance level.

For the S & P 500 to get some stronger buy signal in this mode, the index have to close above the resistance level at 1 422.

Then the S & P 500 is likely to be more volatile and swing a lot of up and down, open it up for too many good trading opportunities for the active investor.

If you trade with short-term strategies, it may therefore be a good idea to take home profits from time to time on short positions. Then you can go short again on upward recoils in the market.