Long – term evidence implies U.S. stocks could be in the early stages of a multi-month decline. Near – term the bulls appear poised for a rebound.
The 30 – minute S&P 500 (SPX) chart courtesy of Trading View illustrates short- term external momentum.
On 01/02/25 the SPX broke marginally below important support made on 12/20/24 at 5,832.30. The bears were unable to sustain the breakthrough, and the SPX rallied for the remainder of the trading session.
Please note the bullish RSI and MACD divergences at the 01/02/24 bottom, the same phenomenon occurred at the SPX 12/20/24 bottom.
Also note that on 01/02/25 the SPX ended its session near the low point made on12/19/24. This is an important factor in analyzing internal U.S. stock market momentum.
The daily NYSE – 52 – week low chart ($MALN) courtesy of Barchart.com examines internal momentum.
NYSE – 52 – week lows reached 163 on 12/19/24. On 01/02/25 with the SPX almost at the same level recorded on 12/19/24, – 52 – week lows were only 41. A significant loss of bearish strength.
The long-term SPX Elliott wave count illustrated in this website prior blog indicates the SPX may have made a major peak on 12/06/24. Long – term momentum and evidence from the SPX Elliott wave count strongly imply the 12/06/24 peak could hold. However, a probable bounce could be retraced into the 90-percentile area.
If there’s a near -term rally it could set up a great shorting opportunity for U.S. stocks.
Watch the SPX – 30 – minute RSI and MACD indicators. Bearish momentum divergences could signal entries for shorting U.S. stocks or stock indices.
Four Dimension Trading 