The strong rebound has occurred with few and minor corrections, leading the S&P 500 to form what looks like a wedge pattern. Yesterday, the index got rejected at the 2,816 resistance. It is an unusual wedge in the sense that the breakout of wedges usually occurs 2/3 of the way to the apex (where the two lines meet). Here we are almost at the end.
Regardless of this, the lower rising trendline is very clear it is likely to be broken to the downside today. This fits nicely in line with my post about the Nasdaq 100
last week where I predicted markets would top out Friday or Monday .
A bearish breakout should take the Index down to around 2,635 which is both the 0.382 retracement and the January correction. Some support at around 2,700.
The last time we saw MACD at its current levels was just after the all-time high in October.There are minor divergences on RSI and volume has been falling slightly during the entire January/February rally.
Equities are ripe for a correction. However, a close above 2,816 will most likely extend the uptrend.