U.S. stocks could be forming a major top.
Today 01/24/24 the S&P 500 (SPX) made a new all -time high at 4,903.68, only a few points above major Fibonacci resistance. The 11/10/21 blog “Possible S&P 500 Topping Zone” illustrated long-term Fibonacci price calculations projecting major SPX resistance at 4,889.71. The charts from this blog were reposted in the 12/16/23 blog “Projection for S&P 500 – Significant Top.
Please see both of these prior blogs.
The SPX charts from the November 2021 blog are illustrated below.
Recently U.S. stocks have had outrageous bearish momentum divergences. This phenomenon continued today while the SPX and Nasdaq Composite made new all-time highs. These bearish divergences combined with the SPX very close to major Fibonacci resistance strongly imply a major peak for U.S. stocks coming soon.
One important factor for a major top has yet to occur, a “Rule of the Majority” signal.
The very effective “Rule of the Majority” signal occurs when only one of the three main U.S. Stock indices make a new high/low unconfirmed by the other two indexes.
Today both the SPX and Nasdaq Composite made new all-time highs. If very soon only one of the three main indices makes a new all-time high – it could signal the ultimate top for U.S. stocks.
The stop loss for second half of a SPX short position initiated at the SPX open on 01/02/24 was triggered at 4,860.00 on 01/22/24. The loss of half of the position was 1.2%.
Another opportunity to short could come soon.
Four Dimension Trading 