SPX - Will the 50DMA hold?
$S&P 500(.SPX)$ : From a weekly Doji Star (mentioned Thursday night) to a much stronger Bearish Engulfing Candle. This reversal was fueled by earlier indecisive price action a bearish RSI divergence and and compounded by the weekly RSI above 70.
Managing risk using key weekly levels, such as $6,702 for the week that just ended, an investor could have avoided about 2.0% of the -2.7% selloff.
Will the 50DMA hold? Zooming out reveals that this MA has been largely decorative for over two years, having been breached easily last time on February 24th.
Chart displays SPX daily candlestick graph with yellow 20MA line, green 50MA line, and red 200MA line overlaid on price bars from August to September, showing recent bearish candles. Inset weekly chart below features green and red candlesticks with purple 50MA line, highlighting a large red engulfing candle at the top around 6700 level.
Bottom panel shows RSI indicator oscillating between 30 and 80 with a bearish divergence marked by a red arrow.
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