This chart shows why the uptrend is in danger

The market turned in a mixed
performance today
with the Nasdaq down while the S&P and Dow finished
positive. Friday’s move down could be significant. Strong uptrends remain strong
when new highs are met with buying enthusiasm. There is currently a decided lack
of enthusiasm among buyers. Every time the market pokes it head out, sellers
arise and smack it back down. It reminds me of the “Whack-a-Mole” game at
amusement parks. In this case, every time the market gets whacked on the head it
pops up with a little more hesitancy. This translates to a loss of momentum. I
showed this S&P 500 chart several weeks ago, and I’ve updated it so that it is
current.

The indicators I’ve included are RSI (14 day) and MACD (12,26,9). I’ve also
marked off several price highs with vertical lines on the chart. What you’ll
notice is that while the market has trended higher, the price momentum
indicators have trended lower over the last 5 months. In other words, the trend,
while up, continues to weaken.



The message remains the same. The weakening uptrend is not a good sign. While it
may not be over yet, it seems to be on borrowed time. How much longer can it
last? Keep a sharp eye out and trade with caution…

Best of luck with your trading,

Rob

RobHanna@comcast.net

For those who may be looking to expand their
knowledge beyond just market timing, my

Hanna ETF Money Flow System
utilizes the VIX in generating trading
signals for spread trades.

Rob Hanna is the principal of a money
management firm located in Massachusetts. He has spent the last several years
developing and refining methods for trading in stocks across multiple time
frames. He selects stocks using both fundamental and technical criteria, and
then trades them using technical analysis techniques.