S & P 500 We Are Going Down..

S & P 500 has previously received sell signals and we assess the risk that large that the index should go down to at least about 1300 sooner or later.

The U.S. large-cap index, the S & P 500 went up last week by a marginal 0.6% and has thus risen by 9.6% this year.

S & P 500, which at this moment is in at 1378.53, has recently gained a lot of sell signals, and also shows other signs of weakness. The stock market has also entered a more volatile phase which means we can expect sharp changes both up and down on the S & P 500.

We are also in the middle of reporting season, which also contributes to individual stocks can move dramatically. Tomorrow after the close of trading, for example, Apple with its report, which can affect the stock market mood a lot. See also our analysis of Apple on April 17.

With today's poor purchasing managers report from Germany and the weak stock markets in the rest of the world S & P 500 will probably start the week with a serious downturn. We will now see whether the index will test support levels at 1358-1363 and 1340.

I have for some time aimed for S & P 500 to go down and test 1340 and most likely also the support level at 1 295.

In order to get some clearer buy signals S & P 500 has to close above the resistance at 1393 but above all the one at 1 422. It lokks like, however, that it will be relatively difficult for the S & P 500 to go over these levels in the near future.

The long trend for the S & P 500, defined as the slope of the 200-day moving average curve, is in itself upward, but the short-term trend is downward.

Stochastic and MACD indicators don´t invalidate the finding that there is a high risk on the downside for the S & P 500. Stochastic showed for example that the previous upward trend was significantly weakened in its final phase. This was the clear negative divergence against the index development.

I will therefore continue to try to go on S & P 500 on any upward move. Especially when the S & P 500 will come near any of its resistance levels. I will aim for a decline to 1340 in the first place and about 1300 secondary. Stop loss on the S & P 500 closes above 1 422 I will also move the stop loss down as the position shows a profit.

Then the S & P 500 is likely to remain volatile and swing a lot of up and down, it opens up for many great trading opportunities for the active investor.

If you use 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 moves in the market.