S&P500 monthly chart: is a rising wedge forming?

The monthly chart of the S&P500 shows price yet again able to close above the 20-month SMA for the 4th month in a row. The Bollinger Bands have kind of lost their “squeeze” set up, suggesting the uptrend will be more of a slow grind on this time frame.

spx monthly

In addition, to be devils’ advocate, the blue trend lines show a possible rising wedge is forming. The upper blue trend line, which goes back to the price highs made in 2007 and is thus very important, it held SPX2135 in check!, and may do so again going forward. Rising wedges are rather typical for 5th waves and need to be kept in mind instead of simple expecting a standard 1, 2, 3, 4, 5-wave sequence. It would also cause for continued frustrating trading over the next months…. The wedge targets SPX2250.

Please note our early responding A.I. buy/sell indicator (3 TI lines directly below price) on the monthly time-frame already gave a buy signal 3 months ago (all 3 TIs moved up in March), whereas for example the monthly MACD still hasn’t produced a buy signal. The lack of a buy signal on the Month MACD does coincide well with a 4th-5th wave set up where the 5th wave is too weak to produce a (in this case) a long-term MACD buy signal.

 Re-posted, in part, from our July 4 weekly digest available to premium members only. Please click here to become a premium member too so you get all this info and more first, and have the edge. We now have a 2 month trial for $2.99 per month!

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