Friday, August 3, 2007
Interesting Chart of the S&P 500
The chart above is a monthly view of the S&P500 going back 20years. I know few people look at charts of this length but this is worthwhile The first trend line (green) has been broken to the downside. Today's action has now broken the second trend line (red). These are very negative developments. To add insult to injury you have a very negative divergence happening with the MACD. Nothing is perfect but stepping back and taken a big picture look can be helpful. This chart is not comforting. I am short Nasdaq via QID and the Dow via DXD, and nursing losses by the way, but given the look of this chart I am considering the ultrashort S&P500 proshares ticker SDS. which have broken out of a trend line. Good trading to you.