In an extensive paper yesterday Bank of America analyzes the technical situation of the SP 500 and the Nasdaq. He spends a good deal of work listing the huge divergences in momentum and market width that both have, most notably the SP 500.
As there are many that he cites, let’s put an example:
Here you can see the few values that have accompanied the index to highs.
And here is another spectacular volume:
On the Nasdaq exactly the same:
Well, in their analysis they consider that all these divergences limit their possibilities of rise.
For the SP 500, they consider that the divergences could cause it to get stuck in the area of 4,300 highs or 4,400 lows and not be able to penetrate into the final target area that gave 4,400-4,420, although it must be remembered that it has moved almost in 4390, with which that area can be taken for granted. This bank is always very fine in analysis.
It is noteworthy that in August it also enters a negative seasonality zone, which is why it sees that zone as a market ceiling at most.
Consider the 4,250 and 4,160 areas as key supports.
For me that zone of 4160 is very important, there are many key levels.
As for the Nasdaq, this is the quote where they explain their point of view
The NASDAQ 100 (NDX) has stalled near its bullish count pattern at 14,590 to 14,830. We suggested raising cash on the NDX when the index began testing this zone earlier this month. Key supports to watch for on the NDX are near 14,550 (7/8 low), 14,073-14,050 (early June break point) and 13,815-13,710 (late June break point).
And here his analyzed graph:
Jose Luis Carpathians