Bearish Outside Day on the S&P 500
Stocks began this week bordering on complacency, according to various sentiment gauges. Yesterday we got the first potential warning of a pullback as the S&P 500 hit a new intraday high and quickly sold off. That resulted in a bearish outside day, which can be a reversal pattern.
The VIX had just the opposite – a bullish outside day. It also occurred around the same 20 area that was the low in mid-August. Has fear bottomed out?
SPX’s MACD has also dropped and is nearing a bearish crossover.
All of this is happening at the nice round number of 3700, which the index exceeded by less than one-third of a percent before falling. The bulls need to be on guard for this becoming more of a rejection.
Again, there’s not much confirmation yet and getting bearish too soon can be a costly mistake. This was just the first potential warning sign.
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The VIX had just the opposite – a bullish outside day. It also occurred around the same 20 area that was the low in mid-August. Has fear bottomed out?
SPX’s MACD has also dropped and is nearing a bearish crossover.
All of this is happening at the nice round number of 3700, which the index exceeded by less than one-third of a percent before falling. The bulls need to be on guard for this becoming more of a rejection.
Again, there’s not much confirmation yet and getting bearish too soon can be a costly mistake. This was just the first potential warning sign.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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