Positive Money Flow Reversal on The S&P 500 Chart

By | December 18, 2016

Just over a month ago the S&P 500 broke above a downtrend line drawn off the highs of the previous two months, its 50 day moving average, and the next week, a zone of support that marked the all-time highs in the index. The move was initially powered by a sharp rise in Chaikin money flow. This week, however, as price momentum has moderated and the relative strength index moved out of an overbought condition, the Chaikin indicator has dropped sharply through its 21 period average to just above its centerline. This reading suggests distribution and if the index takes out the 2250 level there is little in the way of additional support until 2210.
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