After getting stopped out on Friday it is time to review the bigger picture. On the bottom of today's chart are monthly bars of the cash S&p500. August 2007 was a downtrending month with a higher close.
Above the price are two momentum indicators. The top-most is a secondary (or confirming) indicator and below that the Relative Strength Indicator. Note that while the RSI made a new high in May it was not confirmed. This resulted in a "sell" signal when price turned down in June.
As of today this chart remains on a technical "sell" signal and my market view will reflect that. Of note is the positive RSI reversal that has just been formed. The July RSI low is lower than the February RSI low even though price is higher. Although this event has my attention I need to see a similar signal on the weekly chart (which will be covered in my next post) before it substantially alters my outlook.
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