S&P 500 – Momentum Update – 09/15/23

The prior blog “S&P 500 – Upside Target Hit – 09/14/23” noted  “There’s a good chance the SPX made an important top at 4,511.99.  If so U.S. stocks could  begin a sharp and deep multi- week decline.”  

On 09/15/23 the S&P 500 (SPX) fell more than 54 – points.

Weekly and daily SPX momentum oscillators  support the theory that U.S. stock could be in a sharp and deep multi- week decline. 

The weekly SPX chart courtesy of Trading View illustrates long – term momentum.

Weekly Stochastics after the late August SPX peak has bearish line cross.  Both lines are far from the oversold zone which begins at 20%.

RSI continues to trend below its weekly moving average and is in the upper part of the neutral zone.

MACD recently had a second bearish line cross, with Histogram at a lower level than the first bearish line cross.

The weight evidence from the three momentum oscillators implies lower SPX prices in the coming weeks.

The daily SPX chart shows shorter – term momentum.

The SPX drop on 09/15/23 caused another bearish Stochastic line cross.  Both lines are still in the neutral zone.

RSI has again moved below its daily moving average line and is in the middle of the neutral zone at 47%.

 MACD has not had a bearish line cross.

The evidence from two out of the three momentum oscillators suggest lower near – term prices.

On a Log scale chart watch the rising trendline connecting the SPX 03/13/23 and 8/18/23 bottoms.  On 09/15/23 the SPX closed the session just above the line.  Holding above this line is bullish.  A break below the line is bearish.

Even more important than the trendline is the double bottom made at 4,328.08 on 06/26/23 and 4,335.31 on 08/18/23.  Many times, trendline breaks followed by breaks above/below – resistance/support are significant trend confirmations.   In this case a break below 4,328.08 could confirm a significant down trend.   

U.S. – FOMC short-term interest rate decision is due 8:30 AM – EDT on 09/20/23.

*****CORRECTION****** The FOMC rate decision is due 2:00 PM – EDT on 09/20/23.

Sorry for any confusion.