We’re in another intraday situation where the most recent price high was not confirmed either with a new TICK (internal) or momentum oscillator high, so that flashes a quick caution signal (potential consolidation or reversal ahead) for the time being.
Let’s see it:
Click on image to enlarge!
The SPY (S&P 500 ETF) just rose to a new intraday high beyond $109.20 after noon, CST, but in so doing, the 3/10 Momentum Oscillator and NYSE TICK – a key market internal – failed to register new highs, which serves as a classic non-confirmation or divergence.
That hints at a loss of upward momentum, and cautions for a possible reversal, partciularly if we see price continue to break the levels listed above:
Price slightly broke the rising trendline – blue – at the $109.00 level…
The next level of intraday (5-min) support to watch is the $108.80 rage as highlighted. A break under here would signal (confirm) a likely reversal.
If we do not get a bounce off the rising 20 EMA here which converges with key ’round number’ support at $109.00, then we’ll likely see $108.80 and perhaps even lower.
To play devil’s advocate, a bounce off support here and a move to new highs which ALSO forms a new TICK or momentum high would overrule the current non-confirmation and continue the trend-day bias.
Watch closely to what happens in the next hour.
For more daily updates from Corey, visit his blog at Afraid to Trade.com