S&P 500 - Uptrend Exhaustion alert

On Friday, June 5th Standard & Poor's 500 indices reached 951.69 making the 28 weeks' high. Index has gained almost 43% since March's low (666.78). Technical indicators show that this rate of growth may not be sustainable. All three major US indices are strongly overbought in daily and weekly time frames. Standard & Poor's 500 and Dow Jones have MACD Bearish Divergence. Almost 30% of S&P 500 members are overbought, and more than 10% are near the resistance level, while almost 20% have daily MACD Bearish Divergence. S&P and Nasdaq have an Uptrend Exhaustion alert. This alert indicates that the uptrend is exhausted and the trend is about to reverse. The next S&P resistance level is near 1044, but chances are high that S&P may not reach this level soon. The support is near 470.

Standard & Poor's 500

On Friday 35 members of S&P 500 index had a Bearish Dark Cloud Cover candlestick pattern. The Dark Cloud Cover pattern occurs often in a strong uptrend. This pattern is considered as an indication of a future bearish trend. It is more reliable when confirmed by other technical indicators, such as bearish divergence. The Dark Cloud Cover often occurred when there is still too much bullish force for the stock to decline sharply. On the other hand, it is recommended to set a tight stop.

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