In a recent blog post titled, "The Pivotal Moment: Will the S&P 500 Enter a New Bull Market or Continue the Bearish Trend?", I discussed the critical crossroads the S&P 500 currently faces, which could dictate the future direction of the stock market. The S&P 500 has been grappling with a key resistance area, coinciding with the 50% retracement of the entire 2022 downward move. Historically, this level has been a decisive factor in numerous past bear markets, determining whether the market plunges further or reverses direction toward a new bull market. Interestingly, recent S&P 500 breadth indicators have displayed bearish divergences with the underlying index. In this post, we will examine these divergences and review additional charts for both the Nasdaq and Russell indices.
ES and the S&P500 Issues above 200d MA
ES and the S&P500 Issues above 100d MA
ES and the S&P500 Issues above 50d MA
ES and the 100d MA of the S&P500 Advancing - Declining Issues
At the same time, Nasdaq has been potentially forming a bearish Rising Wedge pattern during the last several months. This pattern will be confirmed if NDX / NQ drops below 12000.
NDX, 1d
The Russell Index presents the most worrisome bearish appearance. Should the RTY fall below the 1650 mark in the coming weeks, it would signal that the 2022 bear market has extended into 2023.
RTY, 1d
