ZuluTrade Blog

SP500 is heading for another RSI Divergence

Market View | Wednesday, June 14, 2017 5:48 AM GMT

Most analysts and traders anticipate a rate hike (+25bp) is most probable for today’s Fed meeting. This means market is discounting the event already, however, everything depends on Yelen’s speech. Therefore, the question is whether the Fed provides any further guidance about when the next rate hike is expected to follow and, additionally, whether they will pause when announcing the change in their balance sheet policy. Except from Nasdaq’s sell off last 2 days, the rest major indices are near all-time highs once again. 

SP 500 is moving towards the recent swing high 2446. The distance is just few points. We have noted on the chart, the possibility of an RSI (5) negative divergence in the event of a new higher high. This is something that we need to take in consideration. The four hours timeframe confirms the daily view, but in this case, we are using RSI (14). Naturally, the divergence will be valid as long RSI confirms it. Supports are 2420 and 200 SMA on H4 (around 2400). Potential resistance and target is 2450.



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