Two weeks ago, we highlighted some potential topping patterns on the S&P 500 . It’s played out as expected, and now attention turns to the price channel highlighted in that idea.
Notice how prices ranged from the bottom to the top of the channel since November, including the middle of this month. But something changed this week because SPX didn’t return to the upper line. Instead, it formed a lower high after hitting a wall of sellers.
Next, consider that the all-time high occurred at 9:48 a.m. ET on Tuesday, February 16. That was beginning of the week because of President’s Day. Such early buying without follow-through can be a sign of exhaustion.