As mentioned previously, NDX has hit its HNS right shoulder target at 2783 & reversed down. Now looking for support below its 200DMA around 2650. If that doesn’t hold then lower support is 2550 on the rising multi year trendline.
SPX is showing a bearish shooting star on its monthly chart. First support is 1466, followed by 1415. Technically it looks setup to hit around 1415 before a much stronger reversal. Monthly chart isn’t overbought, so short term declines are expected.
Having said all that, short term $TRIN & $NYMO are showing oversold signs, so be prepared for strong daily reversals along the way down.
The traditional NDX leading indicator is near its moment of truth. A clean right shoulder may forming if NDX stalls around 2783-2793, just about 1% more to go from current levels. If it does stall & breaks down, right shoulder target is about -8% from current.
For a proper bull continuation, NDX should lead the way, break through 2800 & stay above.
Its correlation with SPX is quite high but recently has been diverging, so I’ll be watching for more signs.
NDX has been underperforming versus the SPX for the last 1 year, so if this is a bull continuation, it should still have lots more to go.
2% more till the right shoulder of the Naz, & if SPX follows suit, thats right on its 161.8% fib extension from Nov 2012 lows, & also a multi year high. A suitable place for the bear to appear it seems.