Returning to the daily chart used in the price forecast for the S&P 500 Update on May 16th, price respected the major resistance band that began at 1682.  There are many complementary sell signals in the daily and 3-day charts when price reached that level, the most obvious being indicator divergence in the Composite Index (top indicator) that was not picked up by the 14-period RSI (middle indicator) in either time horizon. However when an “M” pattern forms in a momentum indicator at a price target like the RSI did on the daily chart at the 73 level, it can also be considered a sell signal. If you looked for sell signals when price tested the 1555 and 1632 levels, you could find even stronger sell signals such as key reversals, prior horizontal indicator pivots, and M patterns/indicator failures just under the crossover of the two moving averages on each of the indicators. All this evidence reaffirms that if a market respected a price grid in the past, chances are it will respect it in the future. CLICK FOR MORE →