On the weekly chart below, I am comparing the performance of the S&P500 index with the Shanghai composite index. The trend is clearly still up. And trend is ... your friend. So I'd rather stick with it than go against it by trying to guess where the top will be.
However, since the market started to rally last March, many so-called "gurus" and famous investors (Soros, Faber, Roubini, Tudor Jones, Prechter, Schiff and the likes) have issued warning signals about an imminent market reversal. Are they finally going to be right? Is this market reversal going to take place? Are we going to retest the March lows?
The bearish divergence between the MACD histogram and the S&P500 index is requiring us to be cautious, until the 1100 price level has been crossed to the upside.
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