The negative outlook this contrast justified never diminished, and in fact is becoming more burdensome in the face of accumulated technical weakness evidenced over the past few years exposed in the light of circumstantial similarities presently appearing as the S&P 500 tops and prepares to turn over...
MACD (bottom panel) diving to the negative today takes us back to the late-May 2011 period for a similar setup leading to the same. Then, too, the S&P 500's 50-day moving average was being challenged, while momentum, already weakening, was on track to worsen relative to March 2011 bottom. Presently, momentum's further decline is a matter of anticipation already on our radar, as MACD's early-June 2012 bottom is thought likely to be taken out during the S&P 500's current iteration forming a top.
All this suggests additional, upcoming selling could find the S&P 500 imminently challenging its June 2012 low. Subsequent to this we should expect one final lift, a la June 2011, before the lug nuts fall off.
Per possibility an Elliott "rising wedge" is forming off October 2011 bottom, this could prove untrue for the S&P 500 should the index vacillate as anticipated here. I rather suspect, though, a "rising wedge" still will guide our view toward the NYSE Composite Index. The broad market continues holding up relatively well, while long-established leaders (S&P 500) presently receive the brunt of selling. This distinction probably will persist over coming days, only deepening index performance disparities already in evidence.
The one thing you might take away from the above view is a sense of prospective weakness in store on account of increasing vulnerability objectively displayed over time by every technical measure presented on the S&P 500's daily chart. There is a good case for fearing a bloodbath ahead.
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