S&P, 2014-05-22 Top?

BarroMetrics Views: S&P, 2014-05-22 Top?

I am starting to see some technical signs of a possible top.

The S&P has been in congestion since March 7 2014. I want to focus on the period, April 4 to date. Figure 1 (S&P Cash) displays this focus. On April 4 we see a strong bar down on above normal volume and range. We then see the S&P move sideways until  May 13 when it marginally makes a new  high. The next day the S&P sells off, triggering an Upthrust 18-day sell signal. Last night we saw what appears to be a strong day up. But if we consider the volume, we see that the rally was on below normal volume.

Figure 2 shows a VBI chart of the  E-mini. We see a triple divergence on last night’s high suggesting a down move is on the cards.

Finally Figure 3 shows the latest Fred AMB graph. That shows a turn down on the AMB. If it reaches the 3,800B mark, it would trigger a sell signal for me.

That’s on the bear side. On the bull side……

William Dudley, NY Fed Chief, said on May 21 that there was a case for delaying the tapering. The S&P is still being driven by QE. The belief still paramount that when shove comes to push, the FED will resume printing.

I am on record for saying that until this belief is shaken, whatever the tehnicals may say, we’ll see a continuation of the up move. Let’s see what happens.

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FIGURE 1 S&P Normalised Volume

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FIGURE 2 ES VBI

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FIGURE 3 FRED AMB

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