From August 24 through September 22 SPX has gained 112 points, while momentum lost 62
Price strength alongside declining momentum indicates
weakening market internal —but not yet an outright sell signal.
Historically, comparable divergences produced:
|
Horizon |
Avg
SPX move |
Positive |
|
3 days |
+9 points |
60% |
|
5 days |
+13 points |
60% |
|
10 days |
+31 points |
73% |
Base case: Near-term consolidation followed by
another attempt higher.
- 3–5
day target: approximately 7,775–7,780
- 10-day
target: approximately 7,795
- Bull
confirmation: sustained move above 7,800
- First
support: 7,630–7,650
- Major
support: 7,550–7,590
Bottom Line
The divergence is a yellow flag, not a red flag.
Historical behavior favors modest additional upside over 10 trading days, but
deteriorating internals raise the probability of volatility or a pullback first. A
break below 7,630 would shift the outlook bearish.
