S&P500 Levels - 02/05/24

Chart of the Day: (02/05/24)

S&P 500 Levels: 

• I think the market gains from the beginning of the year, along with a portion from last year will be erased in the next corrective move. 

• In the lower panel is the MACD (Moving Average Convergence Divergence) oscillator used to measure trend momentum. 

• We can see that momentum rotations have been relatively smooth over the last three years, with the initial negative crossover in the MACD (red dots in the lower panel) is followed by a corrective move in the S&P500. 

• When instead, two times in the last three years, price continues to advance with multiple interruptions in the MACD before a decline materializes, the following advance was erased by the correction that followed. 

• This aligns with seasonality and a growing number of indicators showing negative divergences in the broader market. 

• First support for the S&P500 is at 4550. For now, I would expect this to be a buyable pullback in an ongoing uptrend.