Last week I was talking about a likely modest rally coming, which we have seen, and then a low retest, which we have not yet seen but I’m expecting to see this week.
After that I’m thinking we may well see a much larger rally on SPX, and one thing I was waiting to see before that rally was decent positive divergence on the weekly RSI 5, which we now have.
If we do see that larger rally, then I’d be looking for a test, and perhaps a break, of main downtrend resistance, which is at the weekly middle band, now at 4209.
(more…)