SPX punched over the weekly upper band again on Friday for the second punch above the band in the last three weeks,. I don’t want to overemphasize this as a topping signal, but it goes without saying that these punches tend to happen when SPX is looking rather overbought, and on the four previous examples that I have marked on the chart below from the 2011 low, none rose significantly further before a consolidation or retracement period lasting four weeks or more. This would not generally be a place to look for a strong push upwards.
In terms of the primary rising channel, the high on Friday at 1963.91 was just short of my 1965 wedge targets, and was a test of primary rising channel resistance. I had a look at this using the thinnest possible trendlines over the weekend and there is very little play left in the trendline. Even a move to 1970 now would risk breaking it. SPX weekly chart: (more…)