The stock market continues to be range bound in 2015. Buying weakness and selling strength is the profitable methodology this year, with limited success in momentum and short-lived stock trends.
$SPY is stuck in the middle of the five month trading range of $205 support and $213 resistance.
The 50.03 RSI is neutral but it has been the RSI resistance area for the past month.
The MACD is still holding the bearish cross.
Friday’s volume was very light on the rally back over the 50 day SMA.
The $DIA and $IWM loss of the 200 day SMA and inability to recover it last week, shows the first two signs of distribution in stocks. Indexes are diverging and $SPY could follow them.
The $DIA having the “death cross” with the 50 day going through the 200 day was our third warning sign of a potential correction.
Since the July all-time high, we have had four rallies with each one making lower highs.
$XLU going parabolic over the 70 RSI is bearish for the stock market.
The $VIX at 12.83 does not give much room for an upside, as the $VIX 12 has had upside resistance this year.
