S&P 500 Trend Analysis:
The S&P 500 weekly uptrend had started on March 23, 2020 at 2,191.86 and reached 2,879.22 on April 17, 2020, making a 31.36% gain in eighteen business days.
Weekly uptrend has formed a Rising Wedge chart pattern. The Rising Wedge in downtrend is considered as a continuation pattern, and it indicates that the monthly downtrend is not over yet. It is usually followed by the next downtrend sub-wave.
In our previous S&P 500 Trend Analysis, published on April 10, 2020, we suggested:
C wave might be tricky. According to Elliott Wave theory the advancing C wave within upward correction in larger bear markets are just as dynamic and can be mistaken for the start of a new upswing. If C wave advance above 2792.69 50% Fibonacci retracement level, the 50 Day Moving Average will be the next resistance level (currently 2909.56). At this point, it would be a good idea to reduce the risk and use some stop losses techniques... Considering the high risk of the trend reversal, we recommend to use the Parabolic SAR technique to identify the exit points.
The latest Parabolic SAR buy signal was generated on March 24th when S&P 500 closed at 2447.33 above Parabolic SAR (2189.668). The current Parabolic SAR value is 2763.89 that is already 11.45% higher than the March 24th buy price.
^GSPC: S&P 500 Chart: S&P 500 Parabolic SAR signals
The ^GSPC price is now near the 50 Day Moving Average support level. The weekly volatility was 193% above average. The daily Lane's Stochastic and Williams' Percentage Range (W%R) are strongly overbought. Daily Moving Average Convergence Divergence (MACD) has bearish divergence.
^GSPC: S&P 500 Chart: S&P 500 Parabolic SAR signals
More than 34% of S&P 500 component stocks have the daily Williams' Percentage Range (W%R) strongly overbought. It is the highest level since January 18, 2019. Almost 16% of S&P 500 component stocks have daily MACD bearish divergence. It is the highest level since February 22, 2019 - the beginning of the downtrend wave. Taking into consideration the above trend analysis and bearish technical indicators, there is a high probability that the weekly uptrend might be over soon.
