JOIN ME LIVE AT 9 AM ET FOR: TECHNICAL TUESDAYS
The technical picture is getting clearer by the day, and frankly, it’s not painting a pretty picture for anyone chasing momentum at these levels.
I’ve been analyzing the charts across multiple major indices, and what I’m seeing is a consistent pattern of overbought conditions paired with bearish divergence. This isn’t isolated to one index — it’s showing up across the board.
The S&P 500 across tickers like XSP and SPX is flashing the same warning signs. We’re seeing price making higher highs while momentum indicators are disagreeing, creating that classic setup that typically precedes a pullback.
The Nasdaq Piece of the Puzzle
Now, the Nasdaq hasn’t quite printed this same signal yet, but I expect it’s close. Here’s the thing — I can’t see the Nasdaq behaving totally differently from the rest of the market. These indices don’t usually diverge significantly for extended periods.
When one major index is showing clear technical weakness, the others typically follow suit. Everything’s going to take a dip together rather than seeing strength in one area while others weaken.
What’s particularly telling is the indecision we’re seeing in the S&P 500 — four consecutive days of light candles that suggest the market is hesitating at current levels.
What This Means for Your Positioning
This technical setup reinforces why I’m not chasing these highs. When you’ve got multiple indices showing overbought conditions with negative divergence, it’s usually a signal to step back rather than pile in.
I’m positioning for the correction rather than trying to squeeze the last few points out of this move. The risk-reward just doesn’t favor the bulls at these levels when the technicals are screaming caution.
The market rarely gives you perfect signals, but this is about as clear as it gets. Multiple timeframes, multiple indices, all pointing in the same direction.
Stay patient. Better opportunities are coming.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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