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S&P 500 Index Consolidation Warning Update

The consolidation warning issued for the S&P 500 Index from quantifying the StockTwits stream on 3/14/14 almost closed yesterday (3/25/14) at the close. The smoothed indicator barely moved above its downtrend line. This would normally close a signal, but I take a bit of artistic license in my technical analysis.  I like to see a clean break of a trend line to create a signal.  The move yesterday was almost flat and looked toppy so I decided to give the indicator another day before making a call.  Today the indicator rolled over and moved back below the trend line and looks to be resuming its down trend.  The signal continues to warn that lower prices are ahead in the near term.

Here’s a post with a video and some details on how a signal is created.

The signal that volatility is likely to move higher is still open as well. The smoothed indicator came right back to trend and bounced up.  This indicates that volatility is still likely to rise.

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