Since the 03/29/22 peak the S&P 500 (SPX) has not been able to rally more than three trading days. Today 05/26/22 was the fourth rally day since the most recent SPX decline bottom made on 05/20/22. When something different happens in a market or stock its usually evidence of a trend change – in this case up.
The SPX daily chart courtesy of Trading View illustrates the recent action.
The 05/26/22 RSI reading was 47.67, nearly the exact level of 47.68 made on the SPX 05/04/22 peak near a Fibonacci .50 retracement of the SPX January 2022 to May 2022 decline. Today’s SPX daily RSI reading forecasts price could rally to at least this important resistance zone.
Traders are long 50% SPX related non- leverage funds with a stop loss on an SPX move below 3795. Raise the stop loss on the 50% position to a move below SPX 3875.13. Traders initiate an additional 50% position on non-leveraged SPX related funds at the open of SPX trading 05/27/22. Use a move below SPX 3970.02 as a stop loss for the additional 50% position.